Freelancer, unpaid by client for 6+ months

[jmeasns]

I'm a computer programmer (making websites). I live in NY, my client lives in MI. I did work December through January for him (alongside other freelancers), with a verbal and email promise to receive payment within 2 weeks. That payment was never made. He has repeatedly told me to "just wait", and made numerous promises to deliver payment in certain timeframes since then, but has not. I am concerned that he doesn't have the funds to pay at all, or any assets from which to find payment. I'm not sure what the next best step is. He owes a little more than $15,000 to me, as well as more money to upwards of 20 other freelancers. He's continuing to hire more people (who are obviously also going unpaid).

Our initial agreements were via phone and email. I got him to sign a contract in May further solidifying our payment agreement and establishing late fees and my ability to sue if he did not pay. He digitally signed through echosign.com, but has missed the payment deadline on that contract as well.

I'm considering suing, but I'm concerned that he may declare bankrupcy, leaving me with even more debt from hiring a lawyer. Even without declaring bankruptcy, I'm not sure how I would go about collecting the funds even if I did win. If I don't hire a lawyer and choose to represent myself, I'm not sure I have the tools necessary to track him down and bring him to court myself; he recently moved and I don't have his current address. Since I don't have his SSN, or other info, I don't know whether I can sell the debt to a collection agency. I've sent him "formal" notices via email, but if I mail them to him he won't receive them.

Information I have from him includes:
1) Name
2) Email
3) Phone #
4) Previous address
5) Companies (and websites) owned
6) Twitter & other social networking accounts

Any advice or resources would be extremely helpful. I contacted 2 lawyers today in my local area, but I haven't yet met with them. I'm not sure if hiring a lawyer is my best bet right now. Has anyone else gone through this process, or does anyone have professional experience in the area to give me a few tips?

Thank you!

 

[latigo]

I'm a computer programmer (making websites). I live in NY, my client lives in MI. I did work December through January for him (alongside other freelancers), with a verbal and email promise to receive payment within 2 weeks. That payment was never made. He has repeatedly told me to "just wait", and made numerous promises to deliver payment in certain timeframes since then, but has not. I am concerned that he doesn't have the funds to pay at all, or any assets from which to find payment. I'm not sure what the next best step is. He owes a little more than $15,000 to me, as well as more money to upwards of 20 other freelancers. He's continuing to hire more people (who are obviously also going unpaid).

Our initial agreements were via phone and email. I got him to sign a contract in May further solidifying our payment agreement and establishing late fees and my ability to sue if he did not pay. He digitally signed through echosign.com, but has missed the payment deadline on that contract as well.

I'm considering suing, but I'm concerned that he may declare bankrupcy, leaving me with even more debt from hiring a lawyer. Even without declaring bankruptcy, I'm not sure how I would go about collecting the funds even if I did win. If I don't hire a lawyer and choose to represent myself, I'm not sure I have the tools necessary to track him down and bring him to court myself; he recently moved and I don't have his current address. Since I don't have his SSN, or other info, I don't know whether I can sell the debt to a collection agency. I've sent him "formal" notices via email, but if I mail them to him he won't receive them.

Information I have from him includes:
1) Name
2) Email
3) Phone #
4) Previous address
5) Companies (and websites) owned
6) Twitter & other social networking accounts

Any advice or resources would be extremely helpful. I contacted 2 lawyers today in my local area, but I haven't yet met with them. I'm not sure if hiring a lawyer is my best bet right now. Has anyone else gone through this process, or does anyone have professional experience in the area to give me a few tips?

Thank you!

New York’s long-arm statute would give a New York court personal jurisdiction over the client permitting you to sue him in your home state.

But in weighing your options against costs and time, consider that if you push your claim through the court system you’ll eventually have to take up the case in Michigan; either as an initial lawsuit filed in that state or, if you opt to recover a judgment in New York and no exempt assets can be found in New York, then in the course of domesticating the judgment in Michigan.

And even then you be put to the task and expense of locating non-exempt assets in Michigan.

Not a bright picture. I’d assign the claim to a collection agency

 

[Zigner]

Unfortunately, the small claims limit in NY is $5k. You would want an attorney to guide you on this matter.

 

[jmeasns]

Thank you both for the responses. Your advice has been very helpful!

I contacted 2 lawyers. Only one returned my call, and insisted on a retainer for even a preliminary meeting. I'm still weary of that.

If I do sue and win, am I correct in assuming he would be able to declare bankruptcy, and then I would be unable to collect any funds? I know bankruptcy law is complicated, but AFAIK this is a possibility, depending on his circumstances, correct?

Without having his SSN or current address, would I still be able to sell his debt to a collection agency? I'll be searching for a reputable CA next week to explore that option. I assume there's nothing in particular I should be looking out for when deciding on a CA?

Thank you again!