Tips for Freelancers: How to Get a Business to Pay a Bill
A South Australian woman has been left in ‘financial hardship’ after a business that owed her $10,000 left her unable to pay her rent and bills.
Welcome to Sisters In Law, news.com.au’s weekly column solving all your legal problems. This week, our resident lawyers and actual sisters Alison and Jillian Barrett of Maurice Blackburn advise a freelancer about an unpaid bill causing financial hardship.
I’ve been freelancing for the same company since January and really enjoying the work. The problem is, they take years to pay – they owe me over $10,000 and I’m sick of chasing them.
I really need the money as I am now behind on my rent and bills and had to take out a loan.
My bills say to pay within 14 days, but every time I ask where my money is, I’m told ‘it’s coming soon’ and ‘accounts are on it’. What can I do?
I want to continue working for this company, but their slowness in paying is causing me stress and anxiety as well as financial hardship. – Flora, South Africa
It would of course be quite painful and frustrating for you, Flora, when you did the work they asked for but did not get paid.
If you want to continue working with the company, you might consider requesting money up front, or partial payment, before the work is done.
In the meantime, you can take other steps to recover the money owed to you, but you should know that there is no quick fix.
As a first step, you must send a demand letter or demand letter to the company, specifying the amount you are owed and requesting that it be reimbursed within a certain period of time, failing which legal proceedings will be initiated.
You can access a sample Form P1 final notification form on this Court SA webpage.
You should always keep a copy of all letters and documents you send.
The company has 21 days to respond to you. They can:
1. Pay the money in full
2. Negotiate with you to conclude a payment plan
3. Ignore you
If the company enters into a payment plan, make sure this agreement is in writing and signed by both of you. Keep track of any payments made and provide a receipt. Electronic transfers or a bank check are often a safer option than receiving cash in an envelope.
If the company refuses to pay but otherwise talks to you, you can proceed to a pre-action meeting if you both agree.
This meeting is usually called mediation and both parties agree to meet with an independent third party to try to resolve the dispute. The court’s mediation unit can help you organize this.
Mediation can be beneficial because:
1. It is less formal than a court process
2. The parties have more control over the process and the outcome
3. Free mediation services are available, while filing a claim in court involves costs
4. It’s usually faster and more private
If the company ignores you or refuses to attend mediation, you can file a formal claim in the lower court (in the Civil (Small Claims) Division) as the amount at stake is between $6,001 and $40 $000.
When you file the claim in court, you will have to pay a fee of approximately $150 and then hand that claim over to the company. Try giving it to them personally. You will need to prepare an affidavit stating that you delivered the claim to them (“served it”).
The company must then prepare, file in court and provide you with a copy of its defense. If the company does not do so within a specified period, you can ask the court to decide in your favor, without a hearing.
If the company prepares its defence, you will have to go to court and plead your case.
You will need to provide proof that the company hired you to provide the services you performed and that your invoices remain unpaid, despite your request for payment.
Usually, a lawyer cannot represent a party at the court hearing.
If you want a lawyer to act for you, the company must consent or you can ask the court if you think you would be disadvantaged if you did not have a lawyer.
At the end of the hearing, the Magistrate will issue a legally binding decision for the parties. The winning party can usually ask the magistrate to make the losing party pay their court costs.
Strict time limits apply, so you should seek legal advice on your particular situation.
This legal information is general in nature and should not be considered or relied upon as specific legal advice. Persons requiring specific legal advice should consult a lawyer.
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