How to Spot a Customer in Distress-and What to Do Next
In times of economic stress, there is too much money on the line to not review your large projects for red flags. Failing to act quickly when a customer is in distress could cause you to lose some of the remedies available to you-and can leave large sums of money left behind.
Monitor for Red Flags:
- Customer sells business or talks about selling business
- Allegations of theft or embezzlement
- Dismissal of key financial personnel
- Problems covering payroll
- Principal or 3rd party revokes personal guarantee
- Any party in contract chain is having financial troubles-not paying, files bankruptcy, or is placed in receivership
- Paying creditors on one project from proceeds from another
- Not returning phone calls or emails
- Not paying on time or paying in irregular amounts
Know Your Rights:
Knowing your rights means knowing what you are entitled to through your paperwork.
Be mindful of the following items:
- Deadline to file a Mechanic’s Lien Claim
- Deadline to file a Bond Claim
- Deadline to initiate suit
- Personal Guarantees
- The terms & conditions of your contracts
- The credit application
- Suspension of performance
Simplify things with WFJ:
Lien deadlines and notice requirements vary by state, and not staying up-to-date on changes is a costly mistake most companies can’t afford. Staying in touch with your lien team (3rd party vendors, bankruptcy specialists, or the experienced attorneys at WFJ) and your local branches and offices can save you time and money in the long run.