How do I draw up a legal I.O.U.? I do business/life coach consultations over the phone.?

I am set-up on a "pay as you go" basis-no problem. However, 9 weeks ago I started running a tab for a client who is in a difficult divorce situation. The tab has grown quite large, and no date for settlement yet. I’ve never had the need for invoices or bills as people pay me on the spot. My client is in Florida and I am in California. I would like to fax a current amount I.O.U. to her for her to sign, and then updates weekly. What is the best, most legal way to do this-so it would stand up in court even if something should happen to her. The bill is way over the $5000 amount of most small claims courts. Should I have her do several I.O.U.s for each $5000 amount? Is that a legal way to handle this? Any good, sound legal advice appreciated. Thank you- P.S. Had I stuck by my rules of no tabs, the client would have crashed and burned by now thru making emotional, illogical decisions. I gave her advice that has immeasurably helped her situation.
To update: I just recorded her on the phone acknowledging the current amount and saying that I should send or fax her a notarized I.O.U. and that she would sign it and send it back. A voice recording is pretty good evidence in court, YES? Of course, Monday I will be sending and faxing a promissory note. This is good so far, right?

Well, that’s nice that you helped your client but you have not helped your business by allowing her issues to rule the way you conduct your business. Anything that she signs acknowledging the debt should be sufficient. Office supply stores frequently have promissory notes (in the section where they have wills, contracts and other blank forms that you can fill in the blanks).

On another note, don’t assume that every court limits small claims to $5,000 (like Judge Judy). Some courts are significantly more.

You might want to run it by a Florida attorney just to make sure you write it in a way that protects your interests and please, re-think this policy. Trust me, I’ve had businesses and it is NEVER a good idea to let clients do this.

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3 Responses to How do I draw up a legal I.O.U.? I do business/life coach consultations over the phone.?

  1. PelMel says:

    I don’t think your client would be willing to sign a written IOU or Promissory Note at this point (both imply a sort of loan, by the way, but a Promissory Note will usually include a payment schedule). She is already obligated to pay by nature of the fact that she hired you for services. You should definitely send her regular invoices and statements showing what she owes. And keep a record of whatever proof you have of your services to her–phone calls, interview info, written reports, etc. You should also consider not working with her anymore, as it seems unlikely she will pay you. Good luck!References :

  2. Kirk Spock says:

    Any letter that clearly states you are exchanging services for payment will suffice. Clarify the TERMS and state how much you will "front" her before you cut off services. Also state a payment plan with a CLEAR START DATE and have her sign it.

    I would guess, anything you’ve done for her thus far…. she could get out of paying you for since there is no contract or formal agreement.References :

  3. CGordo says:

    Well, that’s nice that you helped your client but you have not helped your business by allowing her issues to rule the way you conduct your business. Anything that she signs acknowledging the debt should be sufficient. Office supply stores frequently have promissory notes (in the section where they have wills, contracts and other blank forms that you can fill in the blanks).

    On another note, don’t assume that every court limits small claims to $5,000 (like Judge Judy). Some courts are significantly more.

    You might want to run it by a Florida attorney just to make sure you write it in a way that protects your interests and please, re-think this policy. Trust me, I’ve had businesses and it is NEVER a good idea to let clients do this.References :

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