The checks came back - what do we do? The complete guide to the money you deserve - voila! Sentence

"You should always make sure that there is a personal guarantee of the owner of the company on the checks" (Photo: ShutterStock)

In the business world in Israel, most small and medium-sized businesses work with the "payments in advance" method.

That is, the business receives goods and gives checks for them on an ongoing basis.

For example, the goods were received on March 1, but the payment for them will only be paid on March 6.

The method is built on the basis of trust between the parties.

But what do you do when the check bounces and the payment is not paid on time as agreed?

Attorney Itamar Sonino explains that "It is important to separate checks from companies and checks from private individuals.

Most of the times a person finds himself in a payment problem is when he receives a check from a limited company. This is because, unlike a private debtor, a person who owes money can access his bank account and his pay slips and impose certain restrictions on him, often to a limited company, Especially in small businesses, there are no assets to seize.

That is, you can find yourself suing a limited liability company, winning the trial, but you will have no where to get the money."

Therefore, he says, "The first legal advice I give to my clients is that no matter who you do business with - a limited liability company or an individual - always make sure you have a personal guarantee from the owner of the company on the checks." This, he says, because If the company collapses, it will be possible to sue the owner of the company personally.

Document your business relationship

Attorney Sonino's second piece of advice is to document your business relationship with everyone. That way, you will be protected to the extent that the debtor makes various claims to avoid payment. "People will sometimes forcefully look for ways to avoid payment.

For example, the debtor can claim that he did not receive all the goods, or received damaged goods, and he does not want to pay for them," says Attorney Sonino.

He adds that "cancelling a check in Israel is a serious action, and the debtor will have to prove in court that he had a good reason to cancel it. In a situation where an objection has been filed against you - that is, the debtor says that he canceled the check rightfully, you need to know how to deal with the allegations that arise".

He adds that "the main argument of the opposing debtors is 'failure to pay'. Therefore, documentation of the business relationship will be able to prove that on your side a proper system was conducted throughout the time, the goods arrived all the time, the debtor paid for them and the debtor never had any claims against the goods, what which can be an indication that these are idle claims. You can present correspondence, delivery certificates and more, which show that this is a claim that was born only after the debtor's check returned. In other words, he is trying to avoid payment, so he will say anything to avoid it."

Attorney Sonino's third piece of advice is that the documentation in each client file should include in an orderly manner at least a receipt, shipping certificates signed by the debtor, and correspondence - whether messages or emails. "In this way, we can convince the court that this is a person who simply doesn't want to pay, so he makes claims in the past." In the card it is important to indicate when goods were received, when

Attorney Sonino concludes by saying that "it is important to know that the Israeli justice system is very patient and accommodating.

A trivial claim in court may convince the judge to authorize the debtor to conduct an entire legal process.

In other words, there are few cases in which the court rejects outright objections from debtors who have received a bounced check.

Therefore, you must be aware that the culture of canceling checks exists and does exist, it is necessary and desirable to be aware that there will always be justifications and excuses to avoid payment, so it is better to prepare for this ahead of time, in accordance with the main points in this article.

That way, you will be able to win in court claims of canceled checks."

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to the firm's page on the legal website.

The article is courtesy of Legal Zap

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