Legal Question in Business Law in New York
Unpaid invoice - client out of business
I have a client that suddently decided to close their doors - going out of business. They even layed off all the employees without paying their last pay checks. I'm left with two outstanding invoices for two months of work worth $17,000. They are in New York and I am in Utah. They don't answer phone calls, messages or emails. What should I do next?
4 Answers from Attorneys
Re: Unpaid invoice - client out of business
It is unlikely that you will have a good chance of recovery unless your client signed the contract personally or if it was incorporated, then if there was a personal guarantee.
This area of law is our specialty, however, we would need some more information before making a complete and proper determination. You are welcome to contact us for a free consultation.
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Re: Unpaid invoice - client out of business
While you can certainly attempt to collect through an agency or hire a law firm to pursue your client, the reality is that if they are incorporated, your chances of collection are close to zero. If your client is not incorporated, hiring a collection agency may be worth it, as, under that particular circumstance, you can pursue the individual for the debt.
However, given the amount of your outstanding invoice it isn't worth suing - your legal fees will far exceed any recovery.
I know that's not the answer you'd like. But it is reality.
Re: Unpaid invoice - client out of business
I concur with another counselor here that if your client was incorporated, recovery will be near impossible (esp. if it has declared bankruptcy). I would suggest looking for any avenue whereby you can either sue or send a collection agency after the principals on a personal level. For example, if contracts and/or invoices were entered into or paid by the principals, that might be one such avenue.
Re: Unpaid invoice - client out of business
Contact me offline for a referral to a pitbull of a collections agency/law firm that I bet would be delighted to help you out with this. Note that I am in no way professionally associated with the firm to which I plan to refer you.
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