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How should we go about getting payment.

North CarolinaMechanics LienNotice of Intent to LienRecovery Options

Hi! We are a mechanical contracting company in Farmville, NC. We have a customer who we installed a HVAC system for on 11/27/2017. The beginning balance was $4,550. He began making payments on 02/05/2018. He made another payment 06/14/18. On 12/04/2018, we received a letter from his lawyers to his creditors stating that he had passed away on 9/1/18. I was wondering what our options were, if any, to receiving payment for our services. Thank you for your help!

1 reply

Jan 8, 2020
Just because a customer has passed doesn't mean payment won't be coming. There are a number of ways to go about collecting payment for work performed - from simple reminders to leveraging lien rights. Let's break down a few potential options.

Talking it out

It's an obvious first step, but it's still worth mentioning: Discussing the matter with the representative of the customer's estate is a good first step to see if and when to expect payment. To find out who to talk to about the debt, it could be helpful to reach out to the attorney who notified the creditors that their client passed away.

Invoice reminders

Another option that's pretty gentle is sending invoice reminders. An invoice reminder is a simple reminder that payment is outstanding. It serves as a little push in the right direction - and sometimes, that's all that's needed.

Demand letters

If it's beginning to look like payment isn't coming or is coming too slowly, then sending a payment demand letter may be in order. A demand letter will generally include specific legal threats and put a deadline on making payment. It serves as a notification that you're taking the debt seriously and willing to do what's needed to get paid.

Notice of Intent to Lien

Mechanics liens are a powerful way to force payment for work performed. And, with liens being so powerful, the mere threat of a lien claim will do the trick a lot of the time. Sending a document like a Notice of Intent to Lien can help to leverage those lien rights into payment. A Notice of Intent to Lien is a warning shot - it lets recipients know that if payment isn't made and made soon, then the payment issues will only become more of a headache. Nobody wants to deal with a lien claim - and that's especially true when trying to sort out an estate. So, the looming threat of a lien can be even more effective when trying to collect from a customer who's passed away. More on Notices of Intent here: What Is a Notice of Intent to Lien and Should You Send One?

Pursuing a North Carolina mechanics lien claim

Mechanics liens were specifically designed to ensure that those who permanently improve real property are paid for their work. So, when unpaid, pursuing a lien claim may well be a powerful option. When a lien is filed, that claim attaches to the project property (rather than any individual) to ensure that payment is made. And, it's hard to sell or take a loan against a property when a lien claim is intact. So again - when dealing with a customer's estate, a lien filing can be particularly powerful since the land likely can't be sold until the lien is resolved. For more information on how liens work, as well as information on filing a North Carolina mechanics lien: - How Do Mechanics Liens Work? 17 Ways a Lien Gets You Paid - North Carolina Mechanics Lien Guide and FAQs - How to File a North Carolina Mechanics Lien | Guide + Form Download
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