Statutory Demand for bad debt?
Statutory Demand for bad debt?
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jacobyte

Original Poster:

4,768 posts

272 months

Friday 22nd February 2008
quotequote all
A long overdue debt from a client looks like it will not be paid.

We've sent letters, etc, with no reply. The last letter gave them 7 days to pay before we take action. That 7 days is now up, and it's time to get mediaeval!

It's not a big amount, just under £1K, so is it worth going down the Statutory Demand route, or is there a more appropriate way (no blokes with baseball bats please)?

Wacky Racer

41,398 posts

277 months

Friday 22nd February 2008
quotequote all
Small claims court.

Just fill the (simple) forms in.....Easy.

Next.

Rough_Diamond

88 posts

224 months

Saturday 23rd February 2008
quotequote all
Wacky Racer said:
Small claims court.

Just fill the (simple) forms in.....Easy.

Next.
You might get a judgement OK, but if you are lucky, he will probably convince the Judge that he can only afford to pay £25 per month.

jamesuk28

2,176 posts

283 months

Saturday 23rd February 2008
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The stat demand is the ultimate form of sabre rattling. It basically says "pay up or else". It can be a very effective weapon but there are several points you must consider.

1. It will cost you between £60 - £150 to issue and serve the demand if you get a Solicitor (no really needed) to draft it and a process server to serve it.

2. If the debtor applies to have the demand set aside it can go to a hearing. If the debtor wins you maybe liable for part or all of their costs and vice versa.

3. If the demand goes ignored your next step is to either wind the company up, or apply for bankruptcy. Both of these courses of action are:
a. Expensive (given the size of the debt)
b. Not guaranteed to satisfy the original debt amount (although you will certainly ruin the debtors day)

If you want to risk the issue / process server fee try it, it may have the desired effect.

A better tack if the debtor is not a PLC, LLP or LTD company is to issue a claim through the county court and then enforce payment via a third party debt order, attachment of earnings or charging order (the latter being pricey)

If the debtor enjoys limited liability an investigation into their trading status may be a useful tact. The director (s) may be personally liable for the debt if they have not traded correctly, ie traded while insolvent.

If you need any free advice feel free to PM me or have a look our our website

soprano

1,613 posts

230 months

Sunday 24th February 2008
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you can issue money claims online now:

https://www.moneyclaim.gov.uk/csmco2/index.jsp

that way they can either attempt to defend the claim, or if they dont you can make an application for default judgment.

there may be difficulty in enforcing it, but as james says above, there are methods that can be used.

Edited by soprano on Sunday 24th February 14:03

jacobyte

Original Poster:

4,768 posts

272 months

Sunday 24th February 2008
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Thanks all - James, I'll be in touch early net week.

Boosted LS1

21,200 posts

290 months

Sunday 24th February 2008
quotequote all
Stat Demands usually frighten the debtor into some course of action, especially if he has assetts to worry about. A scumbag would probably ignore it. Hopefully the bluff would work and he's pay up. If not then it could get expensive and the small claims option might look better. Iirc a stat demand can be served via the letter box at a residential address so long as enquiries have been made to confirm the debtor will receive the demand within 7 days. You just need to ask the wife or a neighbour if Johny debtor lives at the address and will he be home later wink Then send an appointment letter nominating a day for service and if he's not there through the letterbox it goes in a properly addressed envelope. Service on a limited company is via the reception desk at the r/o which is usually a firm of accountants. This is all straightforward stuff and reasonably priced. Issuing court proceedings and following on is where it could get pricy.

Egbert Nobacon

2,835 posts

273 months

Monday 25th February 2008
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Have you or a colleague tried to visit the debtor.

You would then get an immediate idea as to the likelyhood of any repayment at all - and a feel as to whether any legal recourse would be worth it.

Also in my experience actually being face to face with someone often leads to some sort of payment or arrangement, just because you are present.

Obviously the effort worth putting in depends on the location of the debtor in relation to yourself and how make or break this debt is for your/the business

jacobyte

Original Poster:

4,768 posts

272 months

Friday 14th March 2008
quotequote all
A big thumbs-up here for Jamesuk28!

I checked our bank account this morning, and the naughty client has finally coughed up.

James, I don't know how you can do it for twenty notes, but good on ya!

Many thanks again - I will heartily recommend you! biggrin

jamesuk28

2,176 posts

283 months

Friday 14th March 2008
quotequote all
jacobyte said:
A big thumbs-up here for Jamesuk28!

I checked our bank account this morning, and the naughty client has finally coughed up.

James, I don't know how you can do it for twenty notes, but good on ya!

Many thanks again - I will heartily recommend you! biggrin
£20 was our debt collection letters service, if the debt had to be transferred to our main recovery arm (ie specialist services) then the fee would have been a bit more. I just want people to know that not all debts can be collected for such a small sum.

And yes there are cheaper debt collection letters services about, but none offer the features, support or expertise our service does.Thats why we get results in most cases. Some people are hell bent on getting the cheapest possible deal when they should be looking for the best value for money. I have said this a lot of times but will repeat it CHANGE YOUR TERMS AND CONDITIONS TO INCLUDE A CLAUSE THAT STATES "ALL DEBT RECOVERY COSTS WILL BE ADDED TO THE OVERDUE AMOUNT" You can then claim our fee back from the debtor, otherwise you cannot. And why should you be out of pocket because somebody can't be arsed to pay on time?

Glad you are a happy easter bunny, hopefully you will not need us again, but you know where we are if you do.

Edited by jamesuk28 on Friday 14th March 09:45

jacobyte

Original Poster:

4,768 posts

272 months

Friday 14th March 2008
quotequote all
jamesuk28 said:
£20 was our debt collection letters service, if the debt had to be transferred to our main recovery arm (ie specialist services) then the fee would have been a bit more. I just want people to know that not all debts can be collected for such a small sum.
Don't forget that the £20 fee also included you calling them to give them a hard time. smile
jamesuk28 said:
Glad you are a happy easter bunny, hopefully you will not need us again, but you know where we are if you do.
Sure thing.

jamesuk28

2,176 posts

283 months

Friday 14th March 2008
quotequote all
jacobyte said:
jamesuk28 said:
Don't forget that the £20 fee also included you calling them to give them a hard time. smile
Several times, dont forget argue