Client didn't stick to payment plan
Discussion
Hi all
I have a client that failed to pay us about £9K on the agreed 30 day terms saying he had cash flow issues.
I threatened him with court action and he offered us an instalment plan (3 payments of equal amounts being about £3k over 3 months) and completed them as agreed bar the last one due Dec. Rather than call us to renegotiate the last payment he just defaulted. When we asked where the payment was he told (yes, told) us he was paying in Jan!
He puts this down to cash flow issues again and wants to spread the remaining £3K over Dec and Jan. He made a £1K payment in Dec and has offered us the remaining amount Jan 2018.
I refused and gave him 1 week to pay or we would seek payment via the courts again. The week has now passed and we still haven't had the payment.
Therefore, should I just go ahead with the court action assuming he might not pay regardless of his prospective payment plan or should I wait and see if he pays as offered?
My fear is comes Jan he will offer the same excuses and we will be weeks down the road.
I have a client that failed to pay us about £9K on the agreed 30 day terms saying he had cash flow issues.
I threatened him with court action and he offered us an instalment plan (3 payments of equal amounts being about £3k over 3 months) and completed them as agreed bar the last one due Dec. Rather than call us to renegotiate the last payment he just defaulted. When we asked where the payment was he told (yes, told) us he was paying in Jan!
He puts this down to cash flow issues again and wants to spread the remaining £3K over Dec and Jan. He made a £1K payment in Dec and has offered us the remaining amount Jan 2018.
I refused and gave him 1 week to pay or we would seek payment via the courts again. The week has now passed and we still haven't had the payment.
Therefore, should I just go ahead with the court action assuming he might not pay regardless of his prospective payment plan or should I wait and see if he pays as offered?
My fear is comes Jan he will offer the same excuses and we will be weeks down the road.
I would be greatfull for the £6k so far. I mean greatfull in the sence you could easily have got nothing.
I would be paitent and wait for the money and any that you get be thankfull for.
Taking the guy to court may end up winding the company up and you will get pennies or fractions there of in the pound.
I would also review your processes around credit approvals and what due dilligence you do regarding these types of interactions.
I would be paitent and wait for the money and any that you get be thankfull for.
Taking the guy to court may end up winding the company up and you will get pennies or fractions there of in the pound.
I would also review your processes around credit approvals and what due dilligence you do regarding these types of interactions.
You've threatened court action, leaving you nowhere really to go now.
- If you back down, he'll know he can string you out
- If you want to deal with him again, he'll know he can string you out
- If you go through with it, you've the associated costs/hassle, and you'll probably lose him as a customer (if this matters to you).
IF you haven't already, issue a formal letter-before-action giving him e.g. 3 working days to pay up, then see what he does.
(If you have, then the next step is starting proceedings)
- If you back down, he'll know he can string you out
- If you want to deal with him again, he'll know he can string you out
- If you go through with it, you've the associated costs/hassle, and you'll probably lose him as a customer (if this matters to you).
IF you haven't already, issue a formal letter-before-action giving him e.g. 3 working days to pay up, then see what he does.
(If you have, then the next step is starting proceedings)
My threat was valid until yesterday, after which I would take action, so it's still early days.
As for him going out of business he's been trading for a number of years now and has a good Experian rating. He responded positively to the threat of action, just not as fast as I would have liked.
As for him going out of business he's been trading for a number of years now and has a good Experian rating. He responded positively to the threat of action, just not as fast as I would have liked.
havoc said:
You've threatened court action, leaving you nowhere really to go now.
- If you back down, he'll know he can string you out
- If you want to deal with him again, he'll know he can string you out
- If you go through with it, you've the associated costs/hassle, and you'll probably lose him as a customer (if this matters to you).
IF you haven't already, issue a formal letter-before-action giving him e.g. 3 working days to pay up, then see what he does.
(If you have, then the next step is starting proceedings)
He had the 'LBA' by way of email telling him he had until yesterday to pay. Truth is I wouldn't extend terms to him again anyway, but I don't want the courts to think I am taking the pish when he offered an alternative plan albeit not what I wanted. As for the costs won't they simply be added to his bill by the courts?- If you back down, he'll know he can string you out
- If you want to deal with him again, he'll know he can string you out
- If you go through with it, you've the associated costs/hassle, and you'll probably lose him as a customer (if this matters to you).
IF you haven't already, issue a formal letter-before-action giving him e.g. 3 working days to pay up, then see what he does.
(If you have, then the next step is starting proceedings)
vxr8mate said:
My threat was valid until yesterday, after which I would take action, so it's still early days.
There y'go, then.You warned him. He paid over a period, then stopped paying. You warned him again, he gave you some change, then stopped paying again. Third warning comes in the form of a claim. If that doesn't get the remainder (£1,500 of £9,000?) paid, then it gets heard. You've got all the paperwork to show it's valid.
The only reason not to is that you want to keep the relationship going - but surely that's passed now?
vxr8mate said:
but I don't want the courts to think I am taking the pish when he offered an alternative plan
You're not the one taking the pish. He agreed to 30 days when he placed the order. How long ago...?fatjon said:
This sounds like someone who is genuinely trying very hard to pay you. I'm an utter b
d with people who take the piss but I think patience is in order in this case.
I take your point and would have renegotiated had he called to say he was struggling with the last payment. However, when I have to chase him and he tells me he can't pay I feel all is lost and I have no alternative than to go through the courts.d with people who take the piss but I think patience is in order in this case.I deal with bad debtors all the time and yours does actually seem to be making the effort in that you've gotten £7k so far which is more than I can say for some of the dheads I deal with.
A judge would probably see it the same way as well tbh. I'd speak to him, ask him when in Jan he plans to settle the balance and then stick to that deadline and inform him that is the final chance.
It's not like it's going to be resolved through the courts before then anyway.
heads I deal with.A judge would probably see it the same way as well tbh. I'd speak to him, ask him when in Jan he plans to settle the balance and then stick to that deadline and inform him that is the final chance.
It's not like it's going to be resolved through the courts before then anyway.
I have never been able to understand this “be patient “ advice in these circumstances.
The advice to improve your credit checking prior to contract is vital.
Before this stage I’d have issued collection action with costs to be recovered with the debt immediately the 7 day warning expired. What on earth is the point of setting a deadline and then not following up as stated?
Set his credit limit to zero and obtain upfront payment for any future business even if he pays in full now or through the court. We have several customers who continue to trade with us on this basis having learned that we are serious about credit control.
The only good sale is one where the money is received. It follows that the only good customer is one that pays.
[edited for spelling]
The advice to improve your credit checking prior to contract is vital.
Before this stage I’d have issued collection action with costs to be recovered with the debt immediately the 7 day warning expired. What on earth is the point of setting a deadline and then not following up as stated?
Set his credit limit to zero and obtain upfront payment for any future business even if he pays in full now or through the court. We have several customers who continue to trade with us on this basis having learned that we are serious about credit control.
The only good sale is one where the money is received. It follows that the only good customer is one that pays.
[edited for spelling]
Edited by JeremyH5 on Thursday 21st December 10:21
Oakey said:
I deal with bad debtors all the time and yours does actually seem to be making the effort in that you've gotten £7k so far which is more than I can say for some of the dheads I deal with.
A judge would probably see it the same way as well tbh. I'd speak to him, ask him when in Jan he plans to settle the balance and then stick to that deadline and inform him that is the final chance.
It's not like it's going to be resolved through the courts before then anyway.
That’s was my thinking, has the op got 7k as I thought they had rejected the 1k?heads I deal with.A judge would probably see it the same way as well tbh. I'd speak to him, ask him when in Jan he plans to settle the balance and then stick to that deadline and inform him that is the final chance.
It's not like it's going to be resolved through the courts before then anyway.
I
Rather than another 1k in the next 4 weeks probably take a couple of months of court action to squeeze the last 3 k out. Breached the payment arrangement aside this time of year can be hard to find money so the 1k offer and 2k after Xmas didn’t seem that bad.
I see this taking a few months to get anymore money.
Unless the op tries the frozen sausage in the lawn trick? If the debtor lives in a flat they are stuffed
Edited by surveyor_101 on Wednesday 20th December 21:00
It sounds like he hasn't said he won't pay he just wants longer to pay - annoying I know and in breach of your agreement for sure, but the remedy for late payment under law is the addition of interest.
As someone who's represented parties in the small claims court ... I would wait. It's an awful lot of hassle and you will find little favour with Judges if his only crime is to pay late. It's different if he refuses to pay at all but the fact he's paid most of it and simply wants more time for the remainder will make you look like Mr Nasty and you always want to go to Court looking like the poor victim.
As someone who's represented parties in the small claims court ... I would wait. It's an awful lot of hassle and you will find little favour with Judges if his only crime is to pay late. It's different if he refuses to pay at all but the fact he's paid most of it and simply wants more time for the remainder will make you look like Mr Nasty and you always want to go to Court looking like the poor victim.
My advice would be that getting the extra £1k he has offered now is top priority. The sad fact is that court action or not, you might never see the last of the amount owed and writing off £2k is better than £1k.
I wouldn't worry too much about the grant of a further concession until Jan making him think he can string you along - you can still instigate legal proceedings if he doesn't pay in Jan, if you decide it'd be worth it. Bear in mind there's pretty much zero value in suing somebody who hasn't got the money to meet the judgment you might get.
Perhaps a call to say Christmas spirit has got the better of you and if he pays £1k today you'll give him until Jan to pay the remainder but then will start court action for recovery with no further notice. This should be backed up with a letter that clearly says the last part.
I wouldn't worry too much about the grant of a further concession until Jan making him think he can string you along - you can still instigate legal proceedings if he doesn't pay in Jan, if you decide it'd be worth it. Bear in mind there's pretty much zero value in suing somebody who hasn't got the money to meet the judgment you might get.
Perhaps a call to say Christmas spirit has got the better of you and if he pays £1k today you'll give him until Jan to pay the remainder but then will start court action for recovery with no further notice. This should be backed up with a letter that clearly says the last part.
swerni said:
Take the money in Jan then don’t deal with them again unless it’s on a cash up front basis.
This.Within reason the courts should be there for genuine disputes rather than those struggling to pay.
The failure here is extending too much credit to too high a risk. Easily done.
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