Posted by Debbie Cochrane on 7/17/07 8:10am
Msg #200244

Out of Business and Not Paid for Services

I just received a letter from the company I was doing notary signings for, last night, and as it turns out, they are now out of business. Their biggest client (Ditech) dropped them, for what they say, no reason. I did 7 jobs for them the past couple months that they did not pay me for (over $350). Along with this letter, they sent me $30, explaining how sorry they were that this was all they could pay me..does anyone know if I can take any action to get my money?

Reply by John_NorCal on 7/17/07 8:26am
Msg #200253

I think the first thing you need to do is find a lawyer, provide all your documentation and hope for the best.

Reply by TRG_wy on 7/17/07 8:32am
Msg #200255

A lawyer can cost you that much for just an hour or two of their time.

I would collect all of my documentation and file a small claims court claim ASAP. The sooner a judgement or court order is entered, the better for you - puts your claim ahead of others.

Reply by MistarellaFL on 7/17/07 8:34am
Msg #200256

If they are filing bankruptcy...

you want to find out and list yourself as a creditor

Reply by Kevin/Ct on 7/17/07 8:34am
Msg #200257

Well...you could sue them, but if they are out of business it is most likely that there are few funds available to pay your claim in the event that judgment enters in your favor.

It would make a huge difference if you were doing business with individuals rather than a corporation or LLC. In this case there personal assets are not protected by the corporate/LLC shield.

If they file a petition in the bankruptcy court...there really is not to much you can do other than to file a proof of your claim with the court..in which case you will probably wind up with little or nothing as an unsecured creditor.

It is my understanding that revisions in the Bankruptcy Code have made it more difficult for individuals to bankrupt out debts. If I understand the new law...they have to pass a test in order to liquidate claims against them. If the individual earns less than the state's poverty level..he/she will probably be permitted to liquidate the claims. If he/she earns more than the state poverty level...jhe/she will not be permitted to liquidate the claim, and instead gets a 5 year payment plan to pay the debts under a Chapter 13 reorganization.

If you are dealing with a corporation or LLC they normally initiate the case through a Chapter 11 reorganization, but may convert to a Chapter 7 liquidation. In either case unsecured creditors usually wind up with very little if anything.

Reply by Debbie Cochrane on 7/17/07 8:37am
Msg #200259

Thanks for all the info..I started looking into small claims court when I received the letter last night..but, I'm not sure how it works since I live in Illinois and this company is/was located in California..

Reply by TRG_wy on 7/17/07 8:46am
Msg #200262

Doesn't matter where they are, you file in YOUR local court.

Reply by Kevin/Ct on 7/17/07 9:33am
Msg #200275

Not true....In Connecticut a plaintiff can not sue a small claims defendant located in another state unless the defendant owns property in Connecticut. In which case the plaintiff would probably be limited by In Rem jurisdiction, and the recovery of his damages may have to be limited to the property located in Connecticut.

Reply by Debbie Cochrane on 7/17/07 9:41am
Msg #200278

I just sent a message to my county court..waiting for a reply..all the sites I read online for IL are the same as CT. I get the feeling I'm SOL, but I guess I learned a lesson..Can anyone refer a reliable company? I don't want to stop signing just because I got stiffed once..I enjoy doing signings, not just for the money, but to meet different people in my area..

Reply by cyndi_ca on 7/17/07 9:12am
Msg #200264

Who is the Company? n/m

Reply by Calnotary on 7/17/07 9:14am
Msg #200265

Re: Who is the Company?

Yes! what company is this??

Reply by Debbie Cochrane on 7/17/07 9:22am
Msg #200269

Re: Who is the Company?

XP Doc Services..I just filed a claim on the BBB website and now I'm online to see how I can file in small claims court..this is such a pain, but I want my money

Reply by Teddog/CO on 7/17/07 9:28am
Msg #200273

Debbie, I'm sorry to hear about your problem. I wish you good luck collecting but you are going to have to stand in line for payment, and if there's any money left you may get a part of your fees.

Now that this has happened you need to start getting "tough" minded regarding #1. How much you are willing to work for $350. divided by 7 equals $50. per signing, you were losing money to begin with especially when you have to wait a month or longer to get your fee . #2. Never "run a tab" for anyone, that's the perfect way to get "burned." #3. Be Very cautious when a company that gives you the "Bumbs' Rush" , offering you all kinds of work back-to-back before they have PAID for your first job. You are just setting yourself up to get burned.

Debbie, just use the search button for the sad stories of no pay, or slowwww pay companies. These companies cost us money, time and just aggravate you for no reason other then the fact that they are just lousy to work for. Time and time again the seasoned notaries on this board have warned the Newbies regarding LowBall fees and companies. It's a shame that no-one listens.

Wishing you the best and hope you take this advice. It is only meant to help you and not to criticize you in any way.

Best Regards

Reply by Debbie Cochrane on 7/17/07 9:34am
Msg #200276

I was referred to this company by my mother inlaw, when she moved..I've done business with this company for 3 years..never had this problem. But, I now understand what your talking about and will, for sure, take more caution when working with another company.

Thanks for all the recommendations - Hopefully I get somewhere with the IL courts..

Reply by Stuart Posner on 7/17/07 9:50am
Msg #200281

Don't cash the check they sent you....as I understand it

I'm not a lawyer and am not offering legal advise (disclaimer).....if you cash the check they sent you, they may be able to come back and say you accepted the check as "payment in full" and you are REALLY SOL. Again JMHO...."Damn it Jim, I'm a Doctor, Not a Lawyer" (Bones to Kirk for you non trekkers).

"Doc"

Reply by CJ on 7/17/07 10:37am
Msg #200292

XP Docs situation

I talked with Tammy just before this happened. XP Doc has always paid on time, and they are a good company. (I know this will not necessarily get your money back.) She told me that Ditech was lowering their fees to all the SS, and they were going to have the SS bid who could do the job for the lowest fee. (Loan Closers and PLS told me the same thing.) She said she did not want to short-change the notaries by lowering she pays them. She knows that $50 is pleanty low already. She said she didn't want to pay the notaries less, even if she had to only make $10 profit on each loan. But she was very worried if she did not win a spot with Ditech, she could lose her business and her house. She was very scared and asked for prayer.

I found out that Loan Closers did get Ditech's business, but they want to pay notaries $40 per job, and $60 for double, which is ridiculous. Ditech is also advertising that they pay the closing costs now (of course, hoping to get more business.) So now that THEY (Ditech) has to pay the closing costs, they are skimming money from everyone else. And it's not like Ditech (GMAC) is hurting for money. Not like the notaries and the signing services that are just trying to pay the bills.

So MY opinion is: XP Doc is not a lying, bait and switch company. She is in trouble, and that is why she can't pay. These are just the facts as I understand them.

Reply by SharonMN on 7/17/07 10:47am
Msg #200293

Re: XP Docs situation

In any case, a business should be operating with enough cash on hand to pay its existing debts even if it loses all its clients and never gets another. Paying for today's notaries with tomorrow's clients is asking for trouble eventually.

Reply by Debbie Cochrane on 7/17/07 10:48am
Msg #200294

Re: XP Docs situation

I have always liked Tammy..she's a nice person..I'm sorry that she got in trouble, but she was not upfront with me..if she was, maybe I would have been a little more understanding..the fact of the matter is that I provided a very professional service and did not get paid. Instead of ignoring my emails/phone calls, she could have responded. Instead I get a check in the mail yesterday..I open it thinking I'm finally getting paid and it's for $30? That's not even $10 for each job? That's less than $5 each job that I'm owed..did Ditech pay her for the jobs that she completed?

Reply by CJ on 7/17/07 11:01am
Msg #200297

Re: XP Docs situation

It is a terrible situation. I don't know what I would be doing if I were afraid of losing my house. I do think she should have cash on hand, but maybe she just doesn't. Maybe she is not in a position to be up front with you. I don't know. I feel bad for both of you. But I think Ditech is the bad guy here.

I have eaten money before. Unfortunatly, I think it is just part of running a business. Offhand, Quicken Loans closed on me oweing $450. I think altogether since being a notary, I have been shorted over $1000. You can take her to small claims, but if she is in bankruptcy, you might just have to wait in line. Small claims costs about $60 to file, plus a morning off of work.

Reply by Sylvia_FL on 7/17/07 11:09am
Msg #200300

Re: XP Docs situation

"I do think she should have cash on hand, but maybe she just doesn't. Maybe she is not in a position to be up front with you. I don't know. I feel bad for both of you. But I think Ditech is the bad guy here. "

Don't blame Ditech! She should have had enough capital before starting a signing service.
She did not have to accept Ditech's low payments, but regardless of whether she did or didn't, she would have been paid for the signings she was contracted for and the first ones to be paid should have been her signing agents. Whether a signing service gets paid by the title company or not, the signing service is the one that contracted with the signing agent, and if they did not have enough capital to pay their notaries they had no business contracting with the signing agent.

And a signing service should always be upfront with their notaries!!!

Reply by Dorothy_MI on 7/17/07 11:05am
Msg #200299

The real lesson here is

for both NSA's and SS's and even TC's is: DO NOT PUT ALL YOUR EGGS IN ONE BASKET. That is another reason I advise everyone to sign up with as many SS's and TC's as possible. Insurance companies came into being because they spread the loss among many. Now no one likes to not receive payment, but if you've spread your business over MANY entities, you may bleed when you don't receive your payment but you won't die.

Many of you are going to say, "Well, they should have enough money in reserve to pay off all their bills", and I'm not arguing with that, but on the same token, maybe we should have enough in reserve, that the loss of less than $500 will not be the death of us either.

Having worked at GM for over 5 years, several times in the purchasing department, applying downward pressure on ALL suppliers is the number one rule in their play book. Each year a supplier is asked to REDUCE their price by 10% and the ones that don't, lose the contract and the one's that do eventually go into bankruptcy. Many companies thought that their GM contract was a gift from God and in the end found out it really was from the devil. SS's that put all their eggs in one basket by only doing Ditech work are finding that out to their dismay also.

Reply by CJ on 7/17/07 11:18am
Msg #200304

All your eggs in one basket.

Good point: the more SS you are with, the more insulated you are. If you only work for XP docs, you are in trouble. But if they are one of many, it hurts, but the phone is still ringing. When my car breaks down, it easily costs $350 or more. Those things happen.

Tammy should have enough capital to keep going. Do you have enough capital to take a hit too? Honesly, it is terrible that she is paying $10 per job, but I have had pleanty of companys pay be ZERO when they go out of buiness.

The writing is on the wall for this whole business as far as I can see.

Reply by Sylvia_FL on 7/17/07 11:29am
Msg #200309

Re: All your eggs in one basket.

"Tammy should have enough capital to keep going. Do you have enough capital to take a hit too"

Yes! I made sure I had the capital before starting my signing service 4 years ago.
Checks to my notaries are sent out the same week they do the signing, if not the very next day.
What "hit" did she take? She obviously accepted a lower fee from Ditech, but she would have been paid by them, so there is absolutely no excuse not to pay the signing agents she hired.

If I go out of business tomorrow, I will be able to sleep knowing my notaries have been paid for the signings, even though I am waiting on the checks from the title companies.

Reply by Debbie Cochrane on 7/17/07 11:19am
Msg #200305

Re: The real lesson here is

This money is not the death of me..This is a part time thing..I do have a full time job..The point is, I did not get paid..having the chance of losing your home and other assets, is the chance you take by opening your own business..if I don't pay a bill, you can guarantee that I will be turned into Collections and maybe sued for not paying my bill..well, this is somewhat of the same situation? Tammy had a bill to pay me and she didn't pay..it wouldn't matter if this was a large company or individually owned..the point is, I DID NOT GET PAID..

If Ditech is the real problem here, why were the doors closed from XP Doc Services? Why wouldn't XP go after Ditech to get the money they were owed and let their notaries know that they are trying to get their money? I find it somewhat hard to believe that XP was not paid from Ditech..jobs should not have been assigned out to the field in April, May, June or July if XP knew there was a problem dating back to March..why would you continue to service Ditech if you know there's issues?

Reply by ZeeCA on 7/17/07 11:25am
Msg #200307

Re: The real lesson here is you not only put all your eggs

in one LOW BALL basket but Debbie has defended it numerous times on the board here.

MO: If you have a company that does not pay.........I would rather have lost one job that is $350.00 than SEVEN in $50 closings... figure the math.........all that time, gas, and supplies wasted on how many jobs? whereas ONE for that price or therabouts is annoying, maddening and all but you have not spent an incredible amount of time to lose it.

Reply by Dorothy_MI on 7/17/07 2:10pm
Msg #200353

Re: The real lesson here is

Not to beat a dead horse, but you too choose to go into business, not getting paid is a chance you took by opening your own business. Yes, this is a business, it is not a JOB! Thankfully most of us have more winners than loosers and that's how we're able to stay in business. A Hobbyist doesn't feel that getting paid should be a gamble they have to take, that is only for business owners, but if you're in this business, either full time or part time it is a business whether you want it to be or not. I do feel your pain, please don't mistake that but ALL business is a gamble and if you can't take that, then one needs to seek EMPLOYMENT in another field. There is a difference between being a business owner and being an Employee!

If Tammy had diversified her customer base, she probably wouldn't be in the situation she's in now. This is probably exactly what happened: She took Ditech's lower fee, but for quite some time was able to make a go of it because she watched her pennies, maybe did even more (or all) of the work herself, but when the refi business started to tank the volume dropped and there was not enough profit there to meet her fixed expenses. She may have even taken out a loan (and as a small business person, would have had to sign personally), but before she realized it, with the deminishing volume there was not enough money left to pay anyone. I'm not defending her, but if she is an honorable, hard working person, that is probably exactly what happend.

Reply by MelissaCT on 7/17/07 11:31am
Msg #200310

A lot of large companies do this

We're (insert large company name) & we're willing to pay X for abc product/service. Take it or leave it -- we'll just go to your competition.

Or, the local strip mall owner who took over a year to pay for a roof replacement -- made the cost back just on interest during that time, so it ultimately cost nothing to replace the roof (except the relationship with the contractor that got burned on the deal) -- but, there are lots of contractors in that line of work, so it's no big deal, he'll just get someone else next time. Oh, and even if the word gets out that he didn't pay, he'll just claim that the job wasn't done right in the first place to justify the non-payment.

Gosh, that's actually a true story, but it rings so true in our world, too. Sounds very familiar...

Reply by Patty White on 7/17/07 12:35pm
Msg #200325

Re: XP Docs situation

Ua know, you are right, after I wrote my initial response, I sat back and thought about it. Tammy has always been good to me, of course that doesn't help my bills either, but I had to stand behind her, she is a good woman.

I would say we all need to untit and not do closings for this other company, I'm sure not for 40.00. Ditech might just end up with egg on their face over this.

Reply by Patty White on 7/17/07 12:32pm
Msg #200320

Same thing here!!!!!! I have a partner that is an attorney and will be handing this to her.

Reply by Leonard Presant on 7/17/07 12:58pm
Msg #200336

REFUSE TO BECOME A "PROSTITUTE" TO THE INDUSTRY!

I hate to say this, but kiss your money good-bye. After working for this Signing Service for numerous years, I was also burned and received payment ($40.00 last night) for over $350.00 in completed work. WOW...doesn't loyalty pay!

As Notaries, we have nobody to complain to about this situation but ourself. Yes, DiTech DID negotiate a better deal for themself at our expense, thus increasing THEIR profit per loan, and we (the Notary) continue to ask for more of this abuse!

Unfortunately, "Prostitute Notaries" (those who accept loan signings at wholesale rates) are discounting our industry into non-existence and lenders simply don't care! Think about it...this week the Notary performs a signing at $40.00 and next week it will be $35.00 (or even less)...and at this pace, kiss OUR Notary business good-bye!

Notaries need to get a backbone. They need to start saying "NO" to reduced fee signings. If enough Notaries do this, I guaranty that lenders will think otherwise when it comes to reducing OUR fees...especially since the Notary is probably the only face-to-face contact the borrower will ever have!

Only when enough qualified Notaries say "NO" to reduced fees will lenders be forced to pay a fair, just and equitable signing fee.

Best regards and good luck from a very displeased Certified Loan Signing Agent.

Reply by Lynn Brown on 7/23/07 9:43am
Msg #201254

I just got the same letter. I am not sure where to go next. I am contacting the BBB to start. any suggestions?