Over the years I’ve sent maybe three dozen debts to collection. Response of the debtor varied. Some paid immediately, but the majority just ignored attempts at collection.
There is something satisfying about someone frantically contacting you when they’re applying for a mortgage and your debt is a major problem for them. “Sorry, not sorry, this is no longer my concern. Contact the collection agency”.
Back when we used to accept checks, if a check bounced, we had a specific protocol we followed. First we called the person, explained that their check for (let’s say) $20 was returned by the bank and there was a $35 fee added to it. However, if they could come in today and pay back the $20, we’d call it even and we’d eat the bank charge. Often times that was enough motivation for the person to take care of it. Any time after today and they owed the service charge as well. If they didn’t show up in the next day or two we sent the demand letter, registered/certified with a return receipt. After the signed receipt was returned to us we had to wait IIRC 14 days, then turn the whole thing over the police.
Personally, I always liked it when they ignored the letter carrier ringing the doorbell or, better yet, just outright refused to sign it. Partially because it bypassed the 14 days thing and partially because I would bring the unopened letter to the police with everything else. I’d let the investigator open the letter on their own which would prove that what I claimed to send to someone (keep in mind, just because I send you a registered/certified envelope, doesn’t mean there’s anything in it) was actually what was in the envelope.
That was the nice thing about telecheck, back when we used to take checks. If you bounce a check that’s been run through a telecheck machine, you’ll find you can’t write a check at any store in the country that also uses telecheck. Like you, I’d get these calls from someone that bounced a check days or months or years earlier (and from my end, I’d never even know it happened). And while I could technically collect the money and forward it to telecheck, I had no interest in getting in the middle of it. I’d give them telecheck’s number and tell them to take it up with them, they owe telecheck the money, not me.
If there was no other way to get the money I’d hire collection agency simply to harass the thieves.
I had an alternative method of collecting debts I didn’t have to use, but just the knowledge that a business partner of mine had used that alternative to collect debts made some of my clients a little more responsible about paying their bills.
I don’t know if it’s included in this contract but for future contracts, it’s often worthwhile putting in explicit fees for late payment that escalate at set points. They can be useful in court like situations to recoup a little bit extra to make it worth your while to pursue it in court.
You’re right, of course. 
Pretty sure threatening to break legs is frowned upon in Alberta. 
I don’t know how small claims court works in Alberta, but filing costs are low in my (U.S.) state, documentation expenses are negligible, and if you win the case and the losing party ignores the judgment, you can garnish their bank account(s) for a nominal fee.
Been there and done that.
Dennis: “Because of the implication”
I had a brainwave and did a calculation of what writing off this bad debt would do to our income tax picture for 2020 - if I got my calculations right, writing it off will save us $600 in taxes, and the client has stated unequivocally that he is, to paraphrase, “Never ever ever ever ever ever ever going to pay this debt.”
It bothers me because he’s going to get away with de-frauding us and acting like a real dick, but I think our best course is to take the bad debt expense and walk away from worrying about his bad behaviour. And tighten up our contracts and accounts receivable practices for the future.
Thank you all for your input - I read it all, and cogitated on all of it.
If it was me, forgoing the previously mentioned alternative, I’d eat the $600 and sic the debt collectors on him anyway just so he’ll be harassed by them. Nothing turns me into a vengeful rat bastard like stealing from me. That’s not a pleasant place to be though, so maybe you are better off settling for the small victory.
I’m sure you’ll remember it. Sometimes life takes a circuitous route and you may still one day exact a just and fitting revenge in some way.
If you win in small claims court, surely they HAVE to pay? To not pay would be contempt.
That’s not the way it works in ANY US jurisdiction that I know of. Collecting on a court judgement means additional steps and costs that you have to pay regardless of whether you are successful.
Don’t know how it works in Canada.
Definitely true in California. When I was entangled with my brother-in-law over my parents’ estate, he did one thing that my lawyer pointed out was actually criminal, not just civil. When I suggested mentioning that in the demand letter with a “pay back what your stole or I’ll file charges”, my lawyer shut that down immediately. “Absolutely not! In California that’s considered extortion and I could be disbarred! If you really want to file charges, drop me as your attorney, file a police report on your own, and then hire another lawyer to handle the civil aspect later.”
General rule is that it isn’t as easy in Canada to place liens against land title as it seems to be in the US. Land title liens aren’t meant as general debt collection against the owner, but to register claims specific to the piece of land. (Which is one of the things that sovereign citizens who rely on “legal” documents from websites in the States just don’t get. One of the many things…)
There are special systems for builders’ liens, but they are generally meant for construction businesses, and involve statutory hold-backs.
It works the same way. A civil judgment in a Canadian court is just a civil judgment; it’s not up to the court to enforce the judgment. That’s up to the person who won. (Some exceptions apply.)
Enforcement means that the person who won must use the judgment to obtain a writ, which can then be used to proceed with garnishment of wages or bank accounts, seizure of assets, and other ways to settle the debt. As a lawyer who has done collection matters before, I’ve come to feel that it’s almost like getting a judgment is the easy part. The hard part are the “additional steps and costs” that come later.
Given the costs and aggravation of debt collection, which Spoons has mentioned, this seems a reasonable approach. $600 in hand, courtesy CRA, is not to be sneezed at.
I just want to make sure of this, but when you talk about the bad debt expense, what you really mean is not recognizing the revenue from the invoice. Even if you’re on the accrual basis for taxes (I don’t know how popular or required it is in Canada, but it’s relatively rare in the US except for large businesses where it’s required), if you’re doing your 2020 taxes now, you couldn’t have recognized the revenue from the invoice in a previous year since the work was in 2020. If you’re including the invoice in your income regardless of whether it’s paid because you’re on the accrual basis then, yes, you have a bad debt expense as well. But if you’re on the cash basis, there is no separate bad debt expense from not getting paid. You can still deduct all the costs that went into creating what you hoped would be revenue just as you always would, but you can’t fail to recognize the income and also deduct the bad debt along with those expenses.
We are indeed on the accrual basis here for our small business. I will enter this invoice as income for 2020, and I will enter it again as an expense under the “Doubtful Accounts” line. I’ve been in contact with my accountant regarding this issue, and this is under her guidance. 
ETA: I’m a little surprised to hear that accrual basis accounting is not the norm in the US!
A few centuries ago I got my first after school job at a dry cleaners. The owner got successfully sued and raged about refusing to pay. The guy who won the suit hired someone (an off duty policeman) to come to the store one Friday afternoon and 1) collect all the cash in the till and 2) stand there and collect the incoming money as people came to pick up their clean clothes.
Needless to say, this was an immense PITA for the front clerk (me in this case) because dry cleaner bills were never for even dollar amounts and I had no way to make change AND no authority to write off charges down to some amount the customer could actually pay exactly. And people WANTED THEIR CLOTHES. Enough to threaten more lawsuits if they didn’t get their suit RIGHT DAMN NOW. After frantic calls to the owner, he got his BIL to show up with the cash to pay the judgment in full and we got our till money back so people could get their clothes.
I have no idea if that sort of thing is still done, or even legal. And how much to cost to hire the cop. But the guy did get the money he was owed that very day.
You need to get an order specifically to attach the till. And yes it will cost hundreds of dollars an hour to get the police officer (minimum 4 hours around here) so you’re out $1000 minimum which theoretically you can add to the amount to be collected. But it’s just a vicious circle, you need a court order to add the costs and then have some way to collect.
