Tell me if this is a stupid idea

[Haynie]

I think this is a down to earth diverse forum who will give me an honest answer.

We have a couple customers who are WAY behind and owe us several thousand each. Late fees are killing them and they do not have the means to pay enough on the bill to offset the fees. I am not going to stop charging late fees because I expect to pay late fees if I am late paying a bill. It is a natural consequence to paying late. Heck I admit to not being perfect and forgot to pay bill last month and will eat the fee. It will teach me to remember better next time.

That being said I am also aware of their situation and the economy. The Law says I can sell their boats if I jump through a few hoops but people have emotional connections to their boats, and I understand. So to avoid selling their boats I want to propose that they trade something of equal or greater value than their debt. They give it to me, and I sell it.

If you were a long way in debt would you think this was a good idea or insulting? As business people would you think this was a stupid idea? This is new territory for me and am wanting honest answers.

Obviously if my hot blond boss says no it is off the table but thought I would do some market research behind my wife's back before broaching the subject with her, risking an argument and sleeping on the couch.

 

[alphageek]

I think you're in for some other fights then. Many people tend to put emotional and personal value on things that don't translate to cash value. Be prepared that they will expect the trade to be worth far more than what you may actually get for it.

 

[Displaced Canadian]

I'm sure as you know if you don't charge one person late fees and charge another it will be seen as discrimination. Not sure I would accept goods instead of payment. Could you offer them a reduced payment if they drop off the money and pick up the boat at the same time? Might save you the cost of legal fees involved in selling the boat. My experience is in rental properties so I'm not sure exactly how things work for you.

 

[IPD_Mr]

You would think that if these accounts had something of value to sell and no longer use or need then they would have already done that if they are in financial trouble. So that would lead me to think that what is left is something that they need or want, which as Dean says would mean they would value it much more than what it is worth. The key is going to be who does the valuation and how it is sold. While the idea has merritt I see a whole new can of worms being opened that just screams ulcer. Those that have no hope of settling their debt need to just give the boat up. Maybe if you go through the legal hoops on a couple of the people that have no chance of recovering, the others might make an extra effort if they want to save their boat.

 

[thewishman]

It is common for companies to offer to settle outstanding debts. Are the full fees really ever going to be paid, or will they just keep adding up? Getting something is better than adding numbers to unpayable accounts. You don't want customers to think they can stop paying and get a better deal later, but sometimes it pays to reach an agreement.

Get your guys to be part of the solution. Could you offer to stop accruing the late fees for 6 months if they agree to be caught up with past and current charges by that time? Are they using the boats? Would an offer to sell the boats, take out the money they owe (+the fee for taking and selling them) and sending the excess to them?

You can tell I don't know the boat business, but if I were struggling financially, my boat-related payments would be low on my list of must-pay bills. Adding on fees on top of unpaid bills would cause me to think, "Well, I can never catch up, so I'll just stop thinking about it."

 

[mredburn]

DO NOT do this. If they had enough personal goods for you to sell to pay the bill they could have done so themselves. They have not paid you and paid someone else with their money, Or spent it on themselves. Could they sell the boat and settle the bill and have money left over? Start the legal procedings and let them know and make their own decisions. You may not be able to recoup your money if you keep letting the debt pile up. You may be doing them a favor by forcing the issue.

 

[commercialbuilder]

The only way I would handle this is to start the legal proceedings, that way you have the law behind everything you do and are not leaving yourself open to legalities.

 

[alamocdc]

Mark, I had a garage back in the 80's. A guy brought his car in for a noise. Tuend out his brakes were worse than shot. He needed new everything. I know make shops today say things like that when it is not the case, but I wan't one of them. Even the brake cyliders were so bad they couldn't be rebuilt. The problem was he couldn't afford the repairs, but needed the transportaion to be able to get to work. He mentioned having to sell his other car... Long story short, I offered to trade him the work for the other car if it ran. He accepted.

If you enter into it tactfully, you may find that they are willing and have something worthwile they can afford to liquidate in trade. Just explain that you understand their situation, and have thought of a "possible" solution that can work for both parties.

 

[razor524]

I do this type of work for a living and I suggest that you start the legal proceedings to take the boats. You will be surpised how many people are able to come up with the money when their other option is to lose something that they are "emotionally attached" to. You can always stop the process if they pay, and I bet your contract includes provisions that they pay the legal fees as well.

 

[Haynie]

I've made a lot of these arguments with myself and the boss is making the same arguments now. At this point it may not happen, but I refuse to let up on the fees.

If it were not an old houseboat I would have sold it. Not only is it an old houseboat, it is a damaged old houseboat. It was put here because we allow mechanics to come work on people's boats. It works out and we get storage fees along with the chance of storing people's other boats. Now it has kicked me in the butt.

Still considering.

 

[PTsideshow]

If it were not an old houseboat I would have sold it. Not only is it an old houseboat, it is a damaged old houseboat. It was put here because we allow mechanics to come work on people's boats.......... Now it has kicked me in the butt.

Still considering.

Sounds like what people do with the storage lockers/self storage places fill it up and then with no intention of paying the rent for more then a couple months. Leave the stuff, for the rental place to deal with.
:clown:

 

[nativewooder]

Stop the fees when you start proceedings to take possession of the property. Otherwise you may wind up with $0!

 

[Smitty37]

I'm sure as you know if you don't charge one person late fees and charge another it will be seen as discrimination. Not sure I would accept goods instead of payment. Could you offer them a reduced payment if they drop off the money and pick up the boat at the same time? Might save you the cost of legal fees involved in selling the boat. My experience is in rental properties so I'm not sure exactly how things work for you.

Perhaps, but for the last 25 or 30 years, everytime I get charged a late fee on a credit card I call and ask it to be removed. This has happened perhaps 10 times (not all with the same card) and the company has removed the charge every time.

 

[Smitty37]

Hmmmm

It is common for companies to offer to settle outstanding debts. Are the full fees really ever going to be paid, or will they just keep adding up? Getting something is better than adding numbers to unpayable accounts. You don't want customers to think they can stop paying and get a better deal later, but sometimes it pays to reach an agreement.

Get your guys to be part of the solution. Could you offer to stop accruing the late fees for 6 months if they agree to be caught up with past and current charges by that time? Are they using the boats? Would an offer to sell the boats, take out the money they owe (+the fee for taking and selling them) and sending the excess to them?

You can tell I don't know the boat business, but if I were struggling financially, my boat-related payments would be low on my list of must-pay bills. Adding on fees on top of unpaid bills would cause me to think, "Well, I can never catch up, so I'll just stop thinking about it."

That depends on the boat - I personally knew folks at the marina where I kept my boat who lived in a $15K/$20K mobile home and fished from their $50K/$60K boat. In short, the boat payments would have been a lot more important to pay than the home payments.

 

[greggas]

Mark
Having been self - employed most of my life I've ahead to deal with the same issue a number of times. Once you take the step of realizing that your clients do not have the means to pay you I think that getting anything of value to you is fine. Keep in mind once you make this realization I believe it is important to keep in mind that you probably will never see the full value of what is owed ( and you can forget about the late fees ) and you will need to decide on a number in your mind that you can live with.

If you cannot live with getting less than the full value then I would start the process of ceasing the boats . After all this is a business and they agreed to your terms.

 

[John Pratt]

I don't like the idea of bartering their other possessions for past due debts. They will undoubtably feel that what they give you is worth more than what you can actually get for it (think pawn shops). Can you recoup all your expenses and costs from the boats if you seize them? I think I would go to them with a settlement offer; for the sake of argument lets say $0.85 on the dollar (only you can set the amount you think is fair). If they can pay that, then you can move on and chalk it up to a business expense and write off the loss. If they can't make good on that amount, seize the boats and sell them as quickly as possible. In the end you have to ask yourself how much money you are spending continuing to pursue the debt as the fees continue to pile up with the possibility that it may never be paid.

 

[Haynie]

Thanks folks, you have given me things to think about, that I had not given enough thought to.

 

[Jgrden]

You need to make an offer to collect something. It sounds like their is a loss at hand so let's make the best of it. I would consider an offer to waive all late fees for immediate settlement on the bill. The alternative is to lien the boats and sell them for your amount due. 'Tis no time to bicker. They may file BK and leave you totally cold.
John

 

[Turned Around]

i think we need a picture of said "hot blonde boss" before we make a real decision on your situation.

 

[Lucky2]

Start the legal proceedings right away, you've obviously contacted these people and have done whatever you could to get your money. Leaving it as is isn't doing anyone any good, and even though you may have a contract with them, I doubt that you'll ever see any the extra that you are charging them. It is time to stop being a nice guy, they've already taken you for a ride. Personally, I can't understand why you've let this go on for so long, if you are running a business how long can you go without paying your bills, before getting in legal trouble? Stop worrying about them and their financial situation, and start taking care of what's yours by going after them legally.
Len

 

[mredburn]

Here is a cute fact, if they pay you and within 1 year or less of payment they declare bankruptcy the courts will come get the money back. Hows that for putting a twist in your knickers.

 

[GaryMGg]

I would consult with an attorney first and foremost.
Billy's example is quite different; in his case, he bartered his labor for something of value.
Here, the contract was for cash, they haven't paid and now you're trying to figure out how to restructure it so to not lose all value.

 

[Smitty37]

Taking for storage charges

Probably there is a procedure for taking possession for goods left in storage and payment not made. My personal thought is that probably you are on shakey ground either offering to settle for less than they owe or bartering for other goods. I suspect that it is not terribly difficult to get possession. You need to see what the law on abandoned property left in storage is in your state. The fact that it is a boat might not have anything to do with how the law treats it.

 

[Jjartwood]

Why are you doing this to yourself? I don't want to come off as a cold hearted S>O>B>
but you are NOT taking food out of their mouth,nor are you throwing them to the wolves.
You are beating yourself up trying to help them keep something that they can no longer afford,It's time to approach them and state your problem with the situation and ask for the title.If they pay you problem solved,if they give you the title than that is one less debt that they have to deal with.
If they are without the boat now, than they are getting along without it, so it is a want
not a need.
God gives us what we need,but not always what we want.