Collections Law/Bad debtor


Dear Mr. Michael,

I am currently running a small business selling spare parts to another company on 30 days credit term. It has been over 60 days and the debt has yet to be settled. 50% deposit was paid initially upon delivery but the remaining sum is not. Now the sum isn't large and I am tired of all the follow-up calls and I don't want to use lawyer for this "small" stuff. If I make it public disclosing this bad debt online at every social media like facebook and others so that other small businesses like me dealing with (or will deal with) this bad debtor may know it to be a bad paymaster and refuse to do business with it, will I be risking lawsuit from such disclosure? By the way, I have the signed invoice to prove this is not some made up stuff. Is there any section of the law that shines light on such matter? If I insist on such disclosure approach, do you have any suggestion on making this legally acceptable?

Anyone can file a lawsuit so there is always a risk.  But if it is a relatively small sum, why not do this? (1) Send a demand letter to the company for the money, and in it tell them that you plan to file a small claims action.  Tell them also that you will publicize your lawsuit on Facebook and elsewhere.  Offer to discuss the matter with them if they are having trouble making the payment. Give them 5 or 7 days to respond.  (2) If they do not pay or respond with something acceptable, then prepare and file the small claims action.  You can do that without a lawyer, and if you are running a small business and do not know how to file a small claims action, it's a good thing to know how to do.  Once you file the action, then do your publicity.

If you publicize without filing a lawsuit, then there is a risk (slight, but there) that you might be sued for defamation.  But generally speaking it's not defamation to report the existence of a lawsuit and what it's about.  To sue for defamation the defamation would need to show that there was absolutely no basis for the lawsuit.

Hopefully, the defendant will settle to avoid the small claims action.

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Michael T. Hertz


I can answer most questions concerning bankruptcy, whether business or personal, including questions by debtors, creditors, persons interested in purchasing assets from bankruptcy estates, and the like. Also have expertise in tort law, French and Canadian law.


Practiced bankruptcy for 27 years in California and taught bankruptcy for three years in Maine. This included Chapters 7, 9, 11, 12 and 13 cases, representing debtors, creditors (secured and unsecured), bankruptcy trustees, creditors committees, and persons interested in purchasing assets from bankruptcies. Debtors included persons with virtually no money up to large corporations.

Inactive member of the Bar of the State of California. Nonpracticing member of the Bar of Massachusetts. Formerly member of the Maine Bar and conseil juridique in France. Certified by National Committee on Accreditation in Canada.

Georgetown Law Review; California Bankruptcy Journal; Maine Law Review; Dalhousie Law Journal; University of Toronto Law Journal.

Harvard Law School (J.D. 1970; cum laude) and Pomona College (B.A., 1967; cum laude)

Awards and Honors
Selected as a "Superlawyer" in 2005 and 2006 for Northern California.

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