The Process For Chasing Bad Debts

[Real-Whitby]

Hi guys,

Could anyone give me some information on the correct process for chasing bad debts.

I currently have 1 outstanding invoice for £250 for a website I have built for a local small business. Its not a lot of money I know, but in today's economic climate its cash I really need.

I have sent 1 email over 2 month ago asking for payment. About 3 weeks ago the man sent me a personal message on a forum I use saying that he would pay within 2 weeks.

Two weeks passed and no cheque arrived so I returned the private message on the forum politely asking where the payment was.

The lad now claims he is having financial difficulty and wants more time. So not wanting to appear heavy handed Ive asked for payment within 2 weeks and explained that I'm skint too.

I would like to be prepared to deal with this matter officially if possible.

Any advice would be appreciated. Also if the guy does not pay up, am I within my rights to close his site and place a bed debt notice on the home page.

 

[SpeedyExpressCouriers]

Send him a letter asking for payment to be made within 7 days to avoid additional costs. If payment is not received reinvoice applying a £40 late payment fee and again asking to pay within 7 days. If you still do not receive any payment add interest at a daily rate and you can take it to court.

The court will ask what steps you have taken to reach a solution, make sure you have done something.


Have a read.

http://www.compactlaw.co.uk/free-legal-articles/late-payment-commercial-debts-act-1998.html

 

[SpeedyExpressCouriers]

Send him a letter asking for payment to be made within 7 days to avoid additional costs. If payment is not received reinvoice applying a £40 late payment fee and again asking to pay within 7 days. If you still do not receive any payment add interest at a daily rate and you can take it to court.

The court will ask what steps you have taken to reach a solution, make sure you have done something.


Have a read.

http://www.compactlaw.co.uk/free-legal-articles/late-payment-commercial-debts-act-1998.html

 

[Esk247]

be careful about adding a 'Bad Debt' thingy on the website. It looks a bit like a slanging match between designer and client.

If they don't pay up in a reasonable amount of time then you can take the site down and just put a holding page up, perhaps something that links back to your site.

Then look at the way you deal with clients so you don't face this problem in the future.

CONTRACT CONTRACT CONTRACT

Make sure they sign on the dotted line! You will do Y amount of work for X amount of pay.

 

[daniel.benson]

I would send him a Letter Before Action stating full payment must be made within seven days or you will commence legal action.

Also suspend his website page if you can such as: http://shervotec.com/suspended.gif

Remove you files off his website so he can't reuse them to get the site back up with your work.

If he fails to pay, start proceedings using the MCOL system:

https://www.moneyclaim.gov.uk/web/mcol/welcome...

Hope this helps.

 

[roydmoorian]

Make sure all future correspondence with him is with Recorded Delivery.

Give him the option of paying by installments - get some sort of written commitment from him sooner rather than later.

I once made the mistake of believing a customer's myriad pleas that he had paid a builder the exact same sum and made a mistake in his books etc. etc., was having problems and cashing in his pension and the money would be forthcoming in due course.

The debt was not substantial but as a matter of course we factor most of our invoices and he had ignored all communications from the factoring company (not a good sign) before the debt was finally thrown back at us (90 day+) and he told me he above.

We used eventually MoneyClaimOnline after getting the feeling that we could no longer believe a word that he said.

A little bit of internet research gave me an insight into the gentleman's attitude to his suppliers, it also made me realise that I had made a mistake and that unbeknown to me he was trading as a Ltd company even though on his website his company was called after his own name and the Ltd company information was only displayed in relatively small print on the contact us page and not on any of the other 6 or so pages. My mistake - put it down to experience.

So when we got before the judge I was ready for his argument that the invoice should have been made out to his company and not himself.

The judge asked was the work done ? "Yes"

Why have you not paid ? "It should have been to the company - not to me. I want the judgement set aside"

The judge simply amended the judgement by adding Ltd on the end, 2 years after the original invoice date.

The guy is now trading unlimited in the name that I originally invoiced for and trying to wind up the company but CH are refusing - possibly because of a number of CCJ's against it

It seems to be that he (or I should say his Ltd Co) had been let down by one of his major customers but he had struggled on with little hope of returning to profitability for about 3 years until reality finally set in - in the meanwhile though he was still farming out work to other unsuspecting individuals.

Anyway my point is don't wait too long to go down the legal route - get on with it.

 

[jules12345]

I will help you throughout including writing letters etc and thorugh the small claims process, and in court for free, as I do Lay Rep. Provided you are in England and the person your claiming from is.

I am studying my LPC (almost finished my stage one exams). I need the experience this sounds like a simple win to us on the facts above. At the moment my stats stand as one case one win upto now. Go to my forum and have a read from the person I represented in the last case I did.

Please email me. [email protected]

Regards
Jules

 

[SpeedyExpressCouriers]

Can we use you for free too Jules?

 

[daniel.benson]

I will help you throughout including writing letters etc and thorugh the small claims process, and in court for free, as I do Lay Rep. Provided you are in England and the person your claiming from is.

I am studying my LPC (almost finished my stage one exams). I need the experience this sounds like a simple win to us on the facts above. At the moment my stats stand as one case one win upto now. Go to my forum and have a read from the person I represented in the last case I did.

Please email me. [email protected]

Regards
Jules

Don't take this the wrong way but what sort of legal experience do you have in processing claims for the CC?

The reason I ask is sometimes we have to commence legal proceedings at the court and we use the MCOL system but find it time consumeing to get through them all in a fast time.

 

[jules12345]

Don't take this the wrong way but what sort of legal experience do you have in processing claims for the CC?

The reason I ask is sometimes we have to commence legal proceedings at the court and we use the MCOL system but find it time consumeing to get through them all in a fast time.

Only small claims using MCOL upto now. Just finished a case in about/under two months, admittedly it was resolved in ADR.

 

[jules12345]

Can we use you for free too Jules?

The thing is in working alone at this time, I am able to concentrate on each case at a time individually, and fully concentrate on each aspect of the procedure, in order to learn and master the skills.

In order to chase up CCJ's of course a collection agency/bailiff will always be needed and Ill be on here probably seeking a company to do this for any clients that need it - as long as of course you/they get the warrant necessary to do so and you offer a better chance than the court bailiff and are reasonable to the client in terms of costs.

Im hoping to make a business out of small claims with no win no fee representation. I see small claims as like the fillings in Dentistry my father was a dentist. Small Claims are overlooked by most solicitors I believe, as a business potential. 10% or 15% of a 3 grand claim is 3 to 450 quid, not to be sniffed at.