Chasing payment from customer

[stevesolo]

My company has a customer who is flatly refusing to pay an invoice without any legitimate reason. I've tried collection agents, 7 day letter threats of legal action etc. The directors refuse to speak to me. I think the company has cashflow problems. Is there any way I can instigate winding-up proceedings against them (it is a ltd. co.) without first getting a county court or high court judgement against them?

Thanks in anticipation.

 

[simon field]

You'll need to issue a statutory demand prior to a winding-up petition. For this, the debt must be undisputed, and over (I believe) £750. If they defend it, things could get expensive and very slow.

How much are you owed?

 

[stevesolo]

Just under £7,700 + VAT. I don't want to chuck good money after bad, and I fear some spurious excuse for non-payment may be put forward. The company does not have a good reputation, but they had been fine on payments until this. The invoice is now 9 months old! Is that what you call a gestation period??

 

[john1989]

By issuing 7 day letters etc and not following through your threats just makes a mockery of yourself.

Don't waste any more time. Take him to court and get your money.

 

[stevesolo]

Thanks for your reply John. I know what you're saying, but I have been through the court route before and it ended up costing me and I got nothing back. If someone is adamant they are not going to pay, a court judgement is almost impossible to enforce. That's why I would rather hit them hard with a winding-up petition, but I'm not sure I can even make that work.

 

[S Isaac]

What sort of business are they, do they have location (i.e. not run from home)?, do they have assets there?

Maybe worth doing a cheap credit check before you consider putting more money into it.

Make sure you charge them late payment interest too & whatever legal costs you can recover.

 

[Big G]

Hi there,

Sorry to hear about your current situation.

Yes you can issue Winding Up Proceedings against them starting with a Statutory Demand.

Have you had a look at the company status, assets, accounts, directors, etc? If you would like us to have a look in to them then feel free to send us a private message with their details an we will check them out.

Have you ever had payment from them before that you be able to retrieve their bank details from I.e. Cheque or bank transfer remittance? If so then the best option may be to obtain a CCJ and enforce with a third party debt order that is served directly on their bank.

Let us know if you need help.

Good luck.!

 

[john1989]

Thanks for your reply John. I know what you're saying, but I have been through the court route before and it ended up costing me and I got nothing back. If someone is adamant they are not going to pay, a court judgement is almost impossible to enforce. That's why I would rather hit them hard with a winding-up petition, but I'm not sure I can even make that work.

Yes I can understand where you are coming from. However, threats that aren't followed through will just leading to him ignoring your correspondence as they know it won't be enforced.

 

[Charlie B ACS]

As Big G said, a third party debt order could well be effective, served on their bank, or, if you can find out who they are, their customers.

Another tactic, once you have a CCJ against them, is to call the directors for Public examination in court, the fee for which is relatively small.

Most would shy away from having to answer questions in court about their assets, and why they haven't paid, and will pay to avoid it. Alternatively, if they do appear, and then lie about assets they have, they commit perjury, which becomes a criminal offence.

If you do get information about assets, from examination or otherwise, then High Court Enforcement would be the road to go down.

All that said, by issuing a 7 day letter & not following through weakens your position, I'd go straight for a CCJ now, you can always then go for a Stat demand afterwards, which would be far more difficult to Set aside, if the debt has been clarified by a CCJ.

 

[stevesolo]

Thank you for all your replies. On balance I think I'll start with a CCJ and take it from there.

 

[The Sheriffs Office]

If the you are awarded your judgment and it remains unpaid you will need to look to a High Court Enforcement company to enforce the matter.

As asked above, it would make sense to gather as much information on potential assets of the company before instructing an HCEO. This should include any vehicle registrations and locations of stock or assets if possible.

The more info the HCEO is given, the greater chance of a successful recovery.

Here is a short guide: http://thesheriffsoffice.com/high-court-enforcement/enforce-money-judgments

If you need any further guidance please do not hesitate to contact us.

 

[stevesolo]

Thank you, Sheriff's Office. Very useful information.

I'm impressed - very proactive of you.

 

[14Steve14]

When I used to run a small debt collection company, I always advised people to think hard about making threats when trying to collect money, because if you did not follow then through, you looked a fool, Debtors would never take you seriously again.

Before taking any action, you have to do a little background word and try to find out whether there are any assets that could be sold or recovered to cover your debt. if there are no guaranteed money or assets in the business, then no matter what you do, you will never get your money back.

Once you have satisfied yourself that the business can pay you your money with either cash, credit or assets, then start the legal process. If your debtor does not contest the debt, then the chances are the courts will find in your favor. Once you have the CCJ contact someone like the sheriffs office and let them do what they do best, try to recover your money.

There are additional costs involved, but those I do think you can add to the debt. you should also be able to add interest under the late payment legislation, so may not loose everything you put in.

God luck with what ever you decide to do.

 

[The Sheriffs Office]

When using an HCEO all court costs, including those of the actual claim and the costs of the writ are added to sums recoverable.

So is 8% interest per annum from either the date of judgment (under £5k) or the date of the writ (over £5k). This only really becomes a factor on long standing or high value judgments.

Of course this is only relevant if the HCEO can collect and that will be down to whether the debtor has either the funds or assets (as mentioned above).

Unlike debt collectors, HCEOs do not take a % of the debt recovered.

 

[Big G]

Yes but HCEO's do add a lot of their own fees and if it is a private residence they generally attend once or twice and then report back to say 'No Joy, here is our abortive fee'.

This one is a limited company so HCEO's will probably be very interested to take it on.