First Bad Debt
Discussion
Hi All, after a few years in business I have my first non-payment of an invoice for work completed.
Quick summary
I undertook a lead generation project for an acquaintance who runs as a sole trader. We didn't have a signed contract but he did accept the proposal and the terms through email.
It was for payment in advance but because I knew him and it was a rush job I did the work first, or at least most of it.
Since then I have been trying to get payment and have many emails where he has agreed to pay me and 3 where he said he has already paid but then for some reason the bank or his accountant has made a mistake.
He has since closed his business down and now has a very good, full time 12 month contract with a large solicitors. Though he is claiming poverty.
The original invoice was for £1,500 + VAT but because I stopped the work before it was completed, due to non-payment, the outstanding is £1,200 + VAT
I met up with a mutual friend today who also runs his own business and had exactly the same issue with this guy but did get paid after a couple of months.
I have sent an email today, and will be sending a recorded delivery letter, saying if I don't receive all of the funds within 7 days I will begin recovery procedures.
I have just spoken to a couple of debt companies who will charge me £200 to begin the process and then more if it has to go to court.
Has anybody experience of this? did you use debt companies or do a money claim online.
Any help would be appreciated.
Thanks
Quick summary
I undertook a lead generation project for an acquaintance who runs as a sole trader. We didn't have a signed contract but he did accept the proposal and the terms through email.
It was for payment in advance but because I knew him and it was a rush job I did the work first, or at least most of it.
Since then I have been trying to get payment and have many emails where he has agreed to pay me and 3 where he said he has already paid but then for some reason the bank or his accountant has made a mistake.
He has since closed his business down and now has a very good, full time 12 month contract with a large solicitors. Though he is claiming poverty.
The original invoice was for £1,500 + VAT but because I stopped the work before it was completed, due to non-payment, the outstanding is £1,200 + VAT
I met up with a mutual friend today who also runs his own business and had exactly the same issue with this guy but did get paid after a couple of months.
I have sent an email today, and will be sending a recorded delivery letter, saying if I don't receive all of the funds within 7 days I will begin recovery procedures.
I have just spoken to a couple of debt companies who will charge me £200 to begin the process and then more if it has to go to court.
Has anybody experience of this? did you use debt companies or do a money claim online.
Any help would be appreciated.
Thanks
Is he was a sole trader you can easily instigate a County Court claim yourself. The process is started online. First post a formal 'letter before action' setting out what and why he owes you. Give him 7 days to pay and notify him that you will instigate legal action to recover the debt if he doesn't.
If he was Ltd you are likely stuffed.
If he was Ltd you are likely stuffed.
I had this, very similar situation only the friend I did work for had a Ltd company. Spent a few months chasing month, had a token payment but nothing else. I went through IPSE (who were Professional Contractors Group back then), as I was a member, who passed me on to Sid @ Safe Collections ( http://safe-collections.com - 01772 454505). He was immensely helpful and basically took over the whole thing from there. They managed to recover a part payment, but shortly after that my friend put his Ltd company into liquidation. From there I was lucky that I had insurance, again through IPSE, so I was able to recover the rest of the amount.
What Mr Moonlight and Justin said. Don't use debt collectors, they will charge you £200, try to call him twice then give up.
If you have evidence of the original agreement, of the work done and a good e-mail trail you should win. If he has any sense he'll pay up before it gets to court, but it seems he's a bit of a chancer. So before you start, make sure you're prepared to see it through to the end.
If you have evidence of the original agreement, of the work done and a good e-mail trail you should win. If he has any sense he'll pay up before it gets to court, but it seems he's a bit of a chancer. So before you start, make sure you're prepared to see it through to the end.
Dixy said:
Before you do any of the above, doorstep him, the most effective way is to knock on his door and say pay up, everything else costs you money. It is seriously hard to say no on your own doorstep. Yes it takes balls but this s
t owes you money.
I did this once, years ago. Conversation went something like this:t owes you money.(Not to my client but the chap who answered the door) "Good morning, is Mr X in?"
"Yes"
Could I have a quick word with him, please?"
"No"
"Any reason why not?"
"Yes, he's dead"
That was one debt I failed to collect.
Justin and PM are bang on - if a Ltd company and it's effectively gone, forget it, but if a sole trader sue him - you can write your own letter, but perhaps worth getting a solicitor to write one to start with - is only very cheap and looks a bit more serious. You can then do the MCOL stuff yourself if it doesn't work.
2 sMoKiN bArReLs said:
As said, send a notice before proceedings first. I always use 7 days rather than 14 (as I'm an impatient so & so)
It should be 14 days like I've mentioned to comply with Pre-Action Protocol:https://www.justice.gov.uk/courts/procedure-rules/...
Otherwise you risk the other party calling foul when they don't come back with payment of a substantiative answer.
JustinP1 said:
2 sMoKiN bArReLs said:
As said, send a notice before proceedings first. I always use 7 days rather than 14 (as I'm an impatient so & so)
It should be 14 days like I've mentioned to comply with Pre-Action Protocol:https://www.justice.gov.uk/courts/procedure-rules/...
Otherwise you risk the other party calling foul when they don't come back with payment of a substantiative answer.
)2 sMoKiN bArReLs said:
JustinP1 said:
2 sMoKiN bArReLs said:
As said, send a notice before proceedings first. I always use 7 days rather than 14 (as I'm an impatient so & so)
It should be 14 days like I've mentioned to comply with Pre-Action Protocol:https://www.justice.gov.uk/courts/procedure-rules/...
Otherwise you risk the other party calling foul when they don't come back with payment of a substantiative answer.
)If I've already written to the client with details of the claim at least 14 days before I issue the final NBP, then surely there is no time restriction? (As the direction only refers to correspondence setting out the claim, not the actual NBP)
So, I wrote to the client in August setting out the claim, but don't issue a 7 day NBP until October that surely meets the criteria? (I know, don't call me Shirley
)Audicab said:
Hi All, after a few years in business I have my first non-payment of an invoice for work completed.
Quick summary
I undertook a lead generation project for an acquaintance who runs as a sole trader. We didn't have a signed contract but he did accept the proposal and the terms through email.
It was for payment in advance but because I knew him and it was a rush job I did the work first, or at least most of it.
Since then I have been trying to get payment and have many emails where he has agreed to pay me and 3 where he said he has already paid but then for some reason the bank or his accountant has made a mistake.
He has since closed his business down and now has a very good, full time 12 month contract with a large solicitors. Though he is claiming poverty.
The original invoice was for £1,500 + VAT but because I stopped the work before it was completed, due to non-payment, the outstanding is £1,200 + VAT
I met up with a mutual friend today who also runs his own business and had exactly the same issue with this guy but did get paid after a couple of months.
I have sent an email today, and will be sending a recorded delivery letter, saying if I don't receive all of the funds within 7 days I will begin recovery procedures.
I have just spoken to a couple of debt companies who will charge me £200 to begin the process and then more if it has to go to court.
Has anybody experience of this? did you use debt companies or do a money claim online.
Any help would be appreciated.
Thanks
IIRC if the debt isn't disputed (and it seems it isn't), but is unpaid and he is claiming poverty you can petition for his bankruptcy. Or to wind up his company if he is limited. But you need to be confident that he or his company have the money to pay and it needs to be done correctly.Quick summary
I undertook a lead generation project for an acquaintance who runs as a sole trader. We didn't have a signed contract but he did accept the proposal and the terms through email.
It was for payment in advance but because I knew him and it was a rush job I did the work first, or at least most of it.
Since then I have been trying to get payment and have many emails where he has agreed to pay me and 3 where he said he has already paid but then for some reason the bank or his accountant has made a mistake.
He has since closed his business down and now has a very good, full time 12 month contract with a large solicitors. Though he is claiming poverty.
The original invoice was for £1,500 + VAT but because I stopped the work before it was completed, due to non-payment, the outstanding is £1,200 + VAT
I met up with a mutual friend today who also runs his own business and had exactly the same issue with this guy but did get paid after a couple of months.
I have sent an email today, and will be sending a recorded delivery letter, saying if I don't receive all of the funds within 7 days I will begin recovery procedures.
I have just spoken to a couple of debt companies who will charge me £200 to begin the process and then more if it has to go to court.
Has anybody experience of this? did you use debt companies or do a money claim online.
Any help would be appreciated.
Thanks
A solicitor I use does this and is remarkably successful at recovering money. He doesn't often go down the court route. He would probably sort this for you on a conditional fee arrangement (i.e. no win no fee), but I would only introduce you if you are serious about doing it.
I have no affiliation to the chap and if you want me to put you in touch let me know by email.
Thanks all for the information, I have sent off the letter today giving him 14 days to pay. Lets see what happens.
Previously when he has done this to other companies it is only when it is close to the court date that he pays in full.
He must be hoping some people just don't chase him but what a dreadful way to run a business.
Previously when he has done this to other companies it is only when it is close to the court date that he pays in full.
He must be hoping some people just don't chase him but what a dreadful way to run a business.
2 sMoKiN bArReLs said:
2 sMoKiN bArReLs said:
JustinP1 said:
2 sMoKiN bArReLs said:
As said, send a notice before proceedings first. I always use 7 days rather than 14 (as I'm an impatient so & so)
It should be 14 days like I've mentioned to comply with Pre-Action Protocol:https://www.justice.gov.uk/courts/procedure-rules/...
Otherwise you risk the other party calling foul when they don't come back with payment of a substantiative answer.
)If I've already written to the client with details of the claim at least 14 days before I issue the final NBP, then surely there is no time restriction? (As the direction only refers to correspondence setting out the claim, not the actual NBP)
So, I wrote to the client in August setting out the claim, but don't issue a 7 day NBP until October that surely meets the criteria? (I know, don't call me Shirley
)As long as the prescribed stuff is there, then it's all good. The LBA should have:
1) An short overview of what the claim will be for.
2) The evidence that you will rely upon.
3) How much they have to pay by when (at least 14 days).
4) A reference to the Civil Procedure Rules explaining that ignoring this letter can result in sanction and costs (unless you know the party is being professionally represented).
That's just off the top of my head though - There'll be a good template somewhere online which those in.
13m said:
IIRC if the debt isn't disputed (and it seems it isn't), but is unpaid and he is claiming poverty you can petition for his bankruptcy. Or to wind up his company if he is limited. But you need to be confident that he or his company have the money to pay and it needs to be done correctly.
A solicitor I use does this and is remarkably successful at recovering money. He doesn't often go down the court route. He would probably sort this for you on a conditional fee arrangement (i.e. no win no fee), but I would only introduce you if you are serious about doing it.
I have no affiliation to the chap and if you want me to put you in touch let me know by email.
A word of warning if you are considering warning about bankruptcy and going down that route - there are costs involved, and you can make yourself liable if you don't do things properly. A solicitor I use does this and is remarkably successful at recovering money. He doesn't often go down the court route. He would probably sort this for you on a conditional fee arrangement (i.e. no win no fee), but I would only introduce you if you are serious about doing it.
I have no affiliation to the chap and if you want me to put you in touch let me know by email.
IMHO for a grand, it's very high risk in terms of costs you must outlay. Indeed, if the debtor disputes the debt, you may be back to square one.
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