debt collection (in this new era)
Discussion
Hi
I have two sizable invoices owing from last year and early this year from a company, they no longer answer the phone and email (lock down). But given these are significantly overdue, what is the protocol here?
Some people suggest just waiting and not being aggressive, but I'm a sole trader and they are a Ltd that could easily go under.
There has been no dispute with my work and in fact there has been quite a bit of "out of scope" work conducted on my side recently.
Would it be an a
hole move to send this to debt collection proceedings?
I have two sizable invoices owing from last year and early this year from a company, they no longer answer the phone and email (lock down). But given these are significantly overdue, what is the protocol here?
Some people suggest just waiting and not being aggressive, but I'm a sole trader and they are a Ltd that could easily go under.
There has been no dispute with my work and in fact there has been quite a bit of "out of scope" work conducted on my side recently.
Would it be an a
hole move to send this to debt collection proceedings?Depends if you want to work with them again. Have they completely shut down? Or is someone still picking up the post?
I'd send a recorded delivery stating the debt is due and if payment not received by return you will commence proceedings to recover the money. That will of course, burn your bridges with them though.
I'd send a recorded delivery stating the debt is due and if payment not received by return you will commence proceedings to recover the money. That will of course, burn your bridges with them though.
PurpleTurtle said:
Tricky one ... as will be the case everywhere, they are not paying you probably because they are not getting paid from higher up the chain.
A lot of people will be in the same boat and there is no default answer, unfortunately.
They are at least getting government support, I don't qualify. A lot of people will be in the same boat and there is no default answer, unfortunately.
Canute said:
They are at least getting government support, I don't qualify.
I (like a lot of folk here, I'm sure) am in a similar position. Invoice well overdue (no dispute, commission on services they delivered and were paid for last year, so they've had the money from their customers) and getting no response to reminders.Reluctant to "be that guy" but think it's time to send them a Statutory Demand as, like in your case, they'll be getting government support but we're not. TBH I'm waiting for a message along the lines "we're all furloughed so not allowed to pay our bills"...
Will a Statutory Demand work in your case? Less cost and faster for results than a Small Claim, provided the debt is not disputed I think (IANAL, etc...).
Good luck anyway!
Dave2P said:
I (like a lot of folk here, I'm sure) am in a similar position. Invoice well overdue (no dispute, commission on services they delivered and were paid for last year, so they've had the money from their customers) and getting no response to reminders.
Reluctant to "be that guy" but think it's time to send them a Statutory Demand as, like in your case, they'll be getting government support but we're not. TBH I'm waiting for a message along the lines "we're all furloughed so not allowed to pay our bills"...
Will a Statutory Demand work in your case? Less cost and faster for results than a Small Claim, provided the debt is not disputed I think (IANAL, etc...).
Good luck anyway!
I did my monthly statement run and almost all customers(130) had an automated response. No one here, basically. My customers have a 30 day but most stretch it out to 90 . I know exactly how much I will get before things pick up on the 3rd may ! Reluctant to "be that guy" but think it's time to send them a Statutory Demand as, like in your case, they'll be getting government support but we're not. TBH I'm waiting for a message along the lines "we're all furloughed so not allowed to pay our bills"...
Will a Statutory Demand work in your case? Less cost and faster for results than a Small Claim, provided the debt is not disputed I think (IANAL, etc...).
Good luck anyway!
Grimupnorth said:
I'm not sure the courts are working on stuff like this at the moment.
Stat Demand doesn’t require the courts (unless the other side wish to have it set aside).It is what you do after the Stat Demand that might need a court.
The only danger is that your SD tips then into insolvency protection.
Honestly, I’d say start by getting a hold of a Director. Find a phone number, or even a home address (still relatively easy to do in many cases), and try to make contact. Be honest that you’re not doing this lightly but you need paying.
If a Director promises to pay you, get it in writing. A Director’s promise to pay is actionable against the Director individually (not always easy, but can be done, and the threat of it often gets the payment made in any case in my experience).
Only if you can’t get anywhere would I generally go with a SD / court action. But in every case you need to make the gut judgement call as to what is going to be most effective for your creditor.
skwdenyer said:
Stat Demand doesn’t require the courts (unless the other side wish to have it set aside).
It is what you do after the Stat Demand that might need a court.
All correct but it does really need to be served by an agent (forgotten what they are called)It is what you do after the Stat Demand that might need a court.
And they wont be working and neither will the bankruptcy courts.
So a bit of a waste of time at the moment I'd have thought
We have the same issue and sent a 7 day LBA today with our solicitor cc'd. I agree with most that its pretty futile at the minute (depending on the value) but the way i see it that it will elevate us in the cue to get paid quicker! We may have lost a client but tbh cash in the bank now is better than not knowing where we will be in a few months time!!! We have no clients paying at the minute, and s*** rolls down hill, its only a matter of time until everything implodes the way we are going at the minute.
Gorgonzola said:
We have the same issue and sent a 7 day LBA today with our solicitor cc'd. I agree with most that its pretty futile at the minute (depending on the value) but the way i see it that it will elevate us in the cue to get paid quicker! We may have lost a client but tbh cash in the bank now is better than not knowing where we will be in a few months time!!! We have no clients paying at the minute, and s*** rolls down hill, its only a matter of time until everything implodes the way we are going at the minute.
An LBA at the moment is futile, because you cannot do the A.Personally I would be looking at other options currently.
Grimupnorth said:
skwdenyer said:
Stat Demand doesn’t require the courts (unless the other side wish to have it set aside).
It is what you do after the Stat Demand that might need a court.
All correct but it does really need to be served by an agent (forgotten what they are called)It is what you do after the Stat Demand that might need a court.
And they wont be working and neither will the bankruptcy courts.
So a bit of a waste of time at the moment I'd have thought
As to the courts, I don’t know what the current state of play is. But the SD is primarily a tool of persuasion. If uncontested you can still file a small claim and use the uncontested SD as a part of the case.
But as I wrote above, again in my experience, the most powerful tools are contact, persuasion and negotiation.
SD are useful, but if you want to get paid buy a reluctant client you may have to consider telling them you are going to issue a winding up petition in the high court. You'll need a solicitor and could cost 1500 plus.
But you'll never need to action it - a winding up petition once published in the London Gazette means you client's bank account will be frozen within a few days for 3 months whilst the case comes to court.
Get them to take legal advice, but the threat of all their funding been frozen for 3 month (closure of the business), suddenly makes a workable offer appear every time.
PS they must be a limited company.
But you'll never need to action it - a winding up petition once published in the London Gazette means you client's bank account will be frozen within a few days for 3 months whilst the case comes to court.
Get them to take legal advice, but the threat of all their funding been frozen for 3 month (closure of the business), suddenly makes a workable offer appear every time.
PS they must be a limited company.
johnbear said:
SD are useful, but if you want to get paid buy a reluctant client you may have to consider telling them you are going to issue a winding up petition in the high court. You'll need a solicitor and could cost 1500 plus.
But you'll never need to action it - a winding up petition once published in the London Gazette means you client's bank account will be frozen within a few days for 3 months whilst the case comes to court.
Get them to take legal advice, but the threat of all their funding been frozen for 3 month (closure of the business), suddenly makes a workable offer appear every time.
PS they must be a limited company.
The point about a SD is that, if the company ignores it, the debt is “proven” by default. If you skip the SD then the winding-up petition is potentially contested, opening you up to a potential damages claim.But you'll never need to action it - a winding up petition once published in the London Gazette means you client's bank account will be frozen within a few days for 3 months whilst the case comes to court.
Get them to take legal advice, but the threat of all their funding been frozen for 3 month (closure of the business), suddenly makes a workable offer appear every time.
PS they must be a limited company.
That the SD costs nothing is an added bonus
Gassing Station | Business | Top of Page | What's New | My Stuff