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It's
a hard cold fact in child care: Some parents just
don't pay what they owe for services rendered. Some
even go so far as to bounce from facility to facility
to avoid paying. Not only is this damaging to their
child, but it puts child care providers in a hard
spot having to care for a child when they are being
taken advantage of.
Any
caregiver will tell you that the hardest part of their
job is having to ask a parent again and again for
the money they owe, or having to face a parent with
a bounced check. Nerves frayed and not wanting to
be the bad guy, these caregivers would rather be understanding
than stand up for themselves and demanding payment.
Everything in their contract and parent handbook goes
right out the window in one instance of compassion.
And many home care operators never get an advance
of two weeks fees that will protect them in the long
run should a parent obscound without a word or get
behind in their payments.
Contracts
in child care are an absolute must. They protect caregivers
against the unscrupulous parent and provide a detailed
outline of when and how payments for services are
to be made. Signed and dated by both parties, they
are also a valuable tool should the issue be forced
into small claims court.
Contracts
also give soft-hearted caregivers a backbone when
it comes time to tell parents they either pay up or
remove their child from care. Providing the parents
with a copy of the signed contract highlighting the
written agreement where the caregiver reserves the
right to terminate a child after a certain amount
of time is a irrefutable weapon.
The
best way to make sure you don't end up chasing overdue
accounts is to require a "cash" advance
or deposit of, at minimum, a week's tuition, two preferrably,
upon enrollment. No if's, ands, or buts. If you really
want to get a better understanding of the family applying
for your services, during the first interview ask
them how many facilities their child has attended
prior to your service . Get the names of the facilities.
Then call them and find out how reliable the parent
was in paying their fees. Find out why they left the
facility.
Never,
ever, allow a parent to sign on at the interview no
matter how desparate you are to fill the spot. Ask
them to go home and think about the interview to be
sure they are comfortable with your policies and care
first. This will give you an opportunity to do a quick
background check on the parent. After all, you have
no obligation to take any child into care. This is
your business. Make sure you know who you are dealing
with before you sign a contract. More importantly,
ensure your contract has a two-week trial period escape
clause. In the very least this will give you an out
should a parent's check bounce or you find out some
information during your background check that makes
you uneasy.
Make
sure your contract stipulates that you reserve the
right to terminate any child for late payment. This
clause serves as the best evidence in court that the
parent has read and agreed to these terms. Moreover,
keep careful records of when the parent paid you,
how much, for what period of time, and by what methods.
Record check numbers. Mark receipts according to the
above. As they say, the best defense is a good offense.
But
the best written contracts and policy statements are
useless if they are not enforced unilaterially for
all parents. Enforcing overtime or payments due on
one parent while forgiving another can nullify a contract
should the issue go to court.
Handle
overdue accounts in writing. This gives you a traceable
account of your efforts to collect the monies owed
to you and to notify the parent of the overdue account
or bounced cheque. A simple "Uh oh....payment
due" letter handed to the parent the day the
payment is past due is a relatively painless way to
put a parent on notice. The next step would be to
give the parent a demand letter. This can be attached
to the portion of the signed contract which lays out
the payment schedule, just to refresh the parent's
memory and to back up your claim. Parents who have
simply left your care account unpaid will require
the letter be sent registered mail with a return receipt.
The
demand letter should clearly state:
- The
amount of money the parent agreed to pay for child
care
- Your
contract terms indicating when payment is due, and,
in the case of a bounced check, when the new funds
are due
- The
period of time which is unpaid
- The
total amount owed, including any NSF charges for
bounced checks, and
- Your
next course of action should payment not be rendered,
which should include the immediate termination of
care putting a stop to any further monies being
owed.
Keep
a copy of any correspondence with the parent in the
child's file.
Should
the issue end up in the justice system, the court
will look at a cargiver's willingness to work with
the parent. Trying to establish a payment schedule
or erasing any late payment charges if the parent
demonstrates a sincere intent to work with you to
solve the problem, will put you in the good graces
of the court.
If
a parent is willing to accept a payment plan, get
the terms of the agreement in writing using an overdue
account payback agreement and schedule. Outline the
dates payment is to be made, the amount
of the payment, and the date the parent will be released
from their obligation. Get it signed, dated and copied.
Keep accurate track of each payment made and provide
the parent with receipts.
Sadly,
unresponsive parents will have to be taken to court.
Most caregivers having to take action file their claim
with Small Claims Court if the amount being sought
is under $5,000 (this figure depends on the cap that
is set by the court system in your location). Amounts
over the cap will be heard in a higher court. Contact
your local court system, lawyer or legal aid system
for more information.
In
many jourisdictions, if payment of the fees is not
made within 30 days of receipt of your demand letter,
the parent may be liable to you for damages and may
be instructed to incurr the court costs.
Preparing
for court will take some effort on on your part to
learn the laws concerning small claims, contractual
law, etc. Thankfully, utilizing the Small Claims Court
is not all that difficult, and court workers are valuable
assistants in helping you fill out the necessary paperwork
and walking you through the procedures for addressing
the court. Better yet, enlisting the services of a
lawyer for this type of proceeding is not necessary.
As
a final note, always, always, use ethical business
practices no matter how upsetting the process to recover
the monies owed to you may be. This includes avoiding
any form of harassment with the parent. This type
of action serves absolutely no purpose and is not
viewed kindly by the court. The last thing you need
is to be counter sued for harassment. Don't give the
parent anything to use against you.
Resources:
Child
Care Contract
Policy
Manual
Letter
of Overdue Account
Demand
Letter
Demand
Letter for Bounced Cheque
Receipt
for Demand Letter Payments
Idemnity
Agreement and Schedule
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