Molly @ Wingspan
What to do When Your Client Suddenly Stops Paying You

What to do When Your Client Suddenly Stops Paying You

April 9, 2020

Molly @ Wingspan

The global COVID-19 pandemic has turned the world upside down. According to a recent survey of economists by the Wall Street Journal, experts predict that unemployment will hit 13% in June and remain at 10% by December. (It was 4.4% in March.)According to a recent survey conducted by the Freelancer’s Union, 76% percent of freelancers said they lost contracts because of COVID-19 and 65% said that they’ve had more problems than usual finding new gigs. At a time when freelancers are especially vulnerable to getting stiffed, it’s worth repeating: You earned that money, and you deserve to get paid. Of course, your client is probably dealing with a professional or personal catastrophe of their own, so it’s important to be sensitive. If your client hasn’t paid up, you have several options. In 2017, New York adopted the “Freedom isn’t Free” Act (FIFA), which protects the rights of freelancers with contracts worth a total of $800 over a four-month period. Since then, a few other states and cities have worked to beef up their protections for independent contractors. Here are some steps you can take immediately to recover your payment. 1. Deny access to the work you submitted. If your client didn’t pay for your work, you can take it back. For example, if you share photographs via Dropbox, you could remove them from the shared file.2. Write a collections letter. Send your own boilerplate collections letter, with an outline of the steps you plan to take to secure your payment, such as filing a claim in small claims court, reporting them to the Attorney General, and revoking the work you’ve completed.3. Call them out on social media. Search the hashtag #FreelanceIsntFree on Twitter for examples of freelancers who are mad as hell, and not going to take it anymore. 4. Inform the Attorney General’s office. Attorney Generals are in charge of enforcing state laws and protecting consumers and upholding workplace rights. States vary in terms of what they can do for independent contractors, but it’s worth filing a complaint with your state’s AG office in case they see fit to intervene on your behalf. 5. Use a collection agency. For unpaid invoices of $50 and up, you can also consider turning your unpaid invoice over to a collections agency. Fees vary and can be as much as 50% of the total invoice, but many collection agencies don’t get paid unless they successfully collect. 6. File a claim in small claims court. You can also pursue unpaid invoices in small claims courts, where you do not need an attorney in order to file a claim. You can do it even if your client is in another state-–it just needs to be filed where you performed the work. Small claims courts have maximum amounts that vary by place. In New York, the maximum you can file to collect in a city court is $5,000. It’s up to you to determine how much money is worth your time and effort. If the amount you want to collect is more than the maximum for your state’s small claims court, then you will need to seek the advice of an attorney to determine if you want to start a civil case. 7. Ask a lawyer to send a letter. If you end up hiring a lawyer, you can expect to pay a fee, although many attorneys offer a free initial counseling session.8. Sue for theft of services. According to Aaron Deitsch, Esq., an associate attorney at Romano Law, “A theft of services claim typically requires a showing of deception or other active wrongdoing on the part of the other side. A simple breach of contract or non-payment for services provided may not qualify. In those circumstances, you’d be better off suing for damages in small claims court or civil court.”Stop chasing after late payments. Wingspan’s invoicing tool automatically follows up on late invoices, so you can focus on your work. Sign up for a free 30-day trial here.You Might Also Like:How to Apply for Government Support Through the SBA’s Economic Injury Disaster Loan ProgramWingspan Webinar Recap: Lawyers on How to Make Sure Your Clients Pay UpHow to Get Your PPP Loan Forgiven

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