Debt collection agencys

[yuzi87]

Hi,

I am owed over £1000 from different invoices, the company has been saying they cannot pay me as they have no money.

They are a sub-contracting company and they have been juggling payments around and paying different sub-contractors with other clients money.

The oldest invoice is over a month overdue.

I would like to sell my debt to a collections agency and would like to use one recommended on here so i know they are trustworthy and legit.

Any help much appreciated.

Regards

 

[longleaf1]

Have you gone through all other avenues first?

 

[yuzi87]

As in small claims court and a solicitor? I just want the quickest fasest way to get my money back and if i can't get my money then i want to bankrupt their company.

I know 2 other sub-contractors who are owed money as well so maybe a joint effort would help?

 

[Beachcomber]

Bankrupting a company will certainly not be a quick way to get your money back - or good for your business reputation.

Don't let anger / frustration cloud your judgement.
(difficult I know, just had a customer of mine take 3 weeks to pay up)

Send a 'Letter before action' (search 'letter before action template' online for the correct terms / layout) Give them a minimum of 7 working days to pay the invoice - state that faliure to pay within this time could mean the company become liable for costs and interest (you are legally allowed to charge interest @ 7% on outstanding debts iirc.)

This letter usually does the trick - when cashflow is tight companies tend to use the rule of 'the squeaky wheel gets the oil' - ie. the one making the most noise gets prioritised.

If they still do not pay, file a claim with the small claims court - it's about £25 online and only takes a few minutes.

This would be the best way to go - you need to remember to the bigger picture here, you don't want to gain a reputation for being an aggressive business but also need to make sure you are not seen as a pushover. Follow the correct procedure and you should be fine.

 

[Drpepper]

Be nice, offer to accept the money over say three months (£333 a month for example), they will probably be able to find that amount once a month rather than a full £1,000 in one go. It'll keep you business reputation intact and who knows in a years time they may just be your biggest and best customers.

 

[Logistika]

Hi,

I am owed over £1000 from different invoices, the company has been saying they cannot pay me as they have no money.

They are a sub-contracting company and they have been juggling payments around and paying different sub-contractors with other clients money.

The oldest invoice is over a month overdue.

Regards

It'll keep you business reputation intact and who knows in a years time they may just be your biggest and best customers.

Have I missed something here?

Forget reputation of being aggressive. BT would have cut YOUR phone off by now if you hadnt paid them in that timescale.


If a company is telling you they havent the means to pay then it is technically and legally insolvent, and therefore

a) the directors are committing an offence if limited
b) the proprietors are not mitigating their own losses if a soletrader/partnership

You don't say what the overdue invoice relates to, but I'm concerned that they are juggling clients monies. Forget about reputation, forget about writing "woof woof" letters.

If you supplied goods, presumably the terms means the goods are yours until paid for. If so go and visit them, and hand deliver a letter demanding return of goods. Otherwise I assume its a case of being a service invoice, and possibly no terms of business ever being issued to them.

Go and visit them face to face, and don't leave the premises until you are happy with a payment arrangement (and that means at least 25% of the money in cash, or encashable cheque).

They will fob you off, but embarrassment will be your best weapon. Get your hands on the lolly before the other subbies. Sending letters allows other creditors to get their paws on it first.

 

[longleaf1]

Give over will you! wheres a bit of common sense? Going in all guns blazing without even trying to be reasonable is only going to put him last on the list! Its a month overdue not 12 months!

You don't know what the circumstances are. Chances are its just a cashflow issue and simply talking the matter through will sort out the issue. If you get no where send a final demand letter before going through the small claims.

 

[Geoff T]

Bankrupting a company will certainly not be a quick way to get your money back - or good for your business reputation.

Don't let anger / frustration cloud your judgement.
(difficult I know, just had a customer of mine take 3 weeks to pay up)

Send a 'Letter before action' (search 'letter before action template' online for the correct terms / layout) Give them a minimum of 7 working days to pay the invoice - state that faliure to pay within this time could mean the company become liable for costs and interest (you are legally allowed to charge interest @ 7% on outstanding debts iirc.)

This letter usually does the trick - when cashflow is tight companies tend to use the rule of 'the squeaky wheel gets the oil' - ie. the one making the most noise gets prioritised.

If they still do not pay, file a claim with the small claims court - it's about £25 online and only takes a few minutes.

This would be the best way to go - you need to remember to the bigger picture here, you don't want to gain a reputation for being an aggressive business but also need to make sure you are not seen as a pushover. Follow the correct procedure and you should be fine.

just a couple of points to add/amend re BC's - otherwise excellent - post

BC forgot to mention the expense of bankruptcy - more than what you're owed...

Money Claims online fee - 1,000 to 1,500 = £70... £1,501 to £3,000 = £80

Lastly the interest - 8.5% is the rate under late payment legislation, plus the compensation charge of £70.

ps - I also agree with previous... don't let it bug you, and try and resolve without resorting to legal action...

HTH...

 

[yuzi87]

Hi all thanks for your time,

The invoices are for labor, just under 2 weeks worth.
The company in question is a small time company they had 4 directors at first and 2 of them have left within a month of each other due to "personal reasons" this gave me suspicions of something dodgy already.

As i dealt with the main client who was using the sub contracting agency i knew that they had been paying them on time. When i asked the sub contracting company why they can't pay me, all i get is we haven't been paid so we cant pay you.

This is bull as i work for other sub company's who pay you even if they haven't been paid by the client, it should be the risk and part of the whole job being a sub company.

I also know that other sub contractors who they still have on site have been paid when my invoices were over due by 3 weeks. They are paying other sub contractors with my money that the client has paid them. They are choosing to pay the guys on site to keep them on site so they can get more money.

I can guarantee you i will never work for this company again and i am a small company and will not gain a reputation either. I am being told by the company that i shouldn't be speaking to the client or other subcontractors regarding the money either, they are trying to keep sub contractors in the dark.

I do feel stressed about the whole situation i absolutely cannot stand thinking that someone has used me and has one over me.

Sorry for the essay lol

 

[longleaf1]

Hi all thanks for your time,

The invoices are for labor, just under 2 weeks worth.
The company in question is a small time company they had 4 directors at first and 2 of them have left within a month of each other due to "personal reasons" this gave me suspicions of something dodgy already.

As i dealt with the main client who was using the sub contracting agency i knew that they had been paying them on time. When i asked the sub contracting company why they can't pay me, all i get is we haven't been paid so we cant pay you.

This is bull as i work for other sub company's who pay you even if they haven't been paid by the client, it should be the risk and part of the whole job being a sub company.

I also know that other sub contractors who they still have on site have been paid when my invoices were over due by 3 weeks. They are paying other sub contractors with my money that the client has paid them. They are choosing to pay the guys on site to keep them on site so they can get more money.

I can guarantee you i will never work for this company again and i am a small company and will not gain a reputation either. I am being told by the company that i shouldn't be speaking to the client or other subcontractors regarding the money either, they are trying to keep sub contractors in the dark.

I do feel stressed about the whole situation i absolutely cannot stand thinking that someone has used me and has one over me.

Sorry for the essay lol

I feel for you mate its how unfortunately many act within the construction industry.

What it seems to be is that you aren't shouting loud enough.
I would make a last phonecall or visit into the office to give them a last chance to pay you.
A month overdue isn't that much really and they are probably having cashflow problems until they get paid themselves, however this isn't your fault and if they are paying other guys, they are just prioritising.
Should you get no answer from your call or visit, send them a final demand letter clearly stating they have 7 days to pay before further action will be taken, bear in mind though if they don't pay in the 7 days then you will have to carry out that further action.

Do you want to pm me the company if its Ltd and i'll run a credit check??

Don't worry I know its stressful but like someone else said earlier, don't let your frustrations cloud your judgement.

 

[Alan R Price]

For a debt this size, it is in everybody's interests for a compromise to be reached. You are unlikely to get all your money back at once (if at all) so your customer must be made to understand that if he wants your cooperation he has to cooperate with you. This means being straight with you and agreeing a realistic payment plan. You can add interest and charges to your debt under the late payment legislation to help offset your costs of waiting for payment: http://payontime.co.uk/late-payment-legislation-interest-calculators.

If he fails to cooperate there are plenty of debt collection agencies who offer their services on a "no-win-no-fee" basis. I agree with other posters that bankruptcy/liquidation are not appropriate - the costs would be totally disproportionate to the debt; and taking proceedings will not guarantee you get any return.

 

[Vicarious]

Well in the spirit of 'he who shouts loudest' a believable and genuine bankruptcy threat might bring you to the top of the pile of a company juggling to stay alive.

Of course you have to mean it and it might just push them over the edge. If you go for bankruptcy first without a small claims judgement and they are switched on, they will just dispute it.

 

[yuzi87]

Right well i sent an email on the 2nd stating my thoughts and that i expect all my invoices to be paid by the 13th.

On the 13th i will send a letter before action giving them 7 days before i start legal proceedings. A chap called Daniel on here runs a collection agency and says he can help me so i will pass it over to him and maybe file a small claims court as well.

 

[Alan R Price]

It would be interesting to know how you get on. Best of luck!

 

[studiowide]

We've had similar situations and I feel your frustration. I would recommend signing up with these guys who are a firm of business debt collection solicitors http://www.thomashiggins.com/

I got this recommendation on UK business forums a few years back when we first struggled with payments from customers and signing up was the best thing I ever did.

No cost to sign up with them. Fully online service. Letter before action (LBA) from them costs £2 + VAT. Late payment demand is £5. I find that in nearly all cases the customer will pay as soon as they get the LBA. I have had 1 case where I had to escalate it to the final stage prior to going to court and then the customer agreed at the 11th hour to a payment schedule.

I have also had 1 case where a customer did not have the funds to pay me and kept breaking a previous agreement to settle - I got fed up with chasing payment schedules and restarted the LBA which was followed up with the demand letter which was followed up with a court letter - which went to court. Finally, the customer took it all the way and was visited by the bailiff. They ended up proposing the same agreement of payment schedule that we originally had (at a further expenses to the customer for bailiff costs) which we agreed to accept. The benefit now is I do not have to chase payments the collection agency does this, so they are less likely to default - and so far, so good.

In both of these cases above my involvement and time spent was 5 mins to set up the original LBA details and then a couple of mins now and then replying back to a few emails from the solicitor who handled all of the correspondence.

I guess bottom line is you can't avoid bad payers but you can have a process to limit stress on you side and also one that gives them zero wiggle room.

Hope that helps.

Carl.

 

[Drpepper]

one that gives them zero wiggle room.
Carl.

Well I hope all you hard nosed business people that call in debt collectors for an invoice that's just 1 month overdue are given a bit more slack and understanding than you are showing here when you hit a temporary cashflow issue. Particularly if £1,000 is such an issue for you, suggests you must be very vulnerable to the exact same issues that face your customer.

 

[yuzi87]

Well I hope all you hard nosed business people that call in debt collectors for an invoice that's just 1 month overdue are given a bit more slack and understanding than you are showing here when you hit a temporary cashflow issue. Particularly if £1,000 is such an issue for you, suggests you must be very vulnerable to the exact same issues that face your customer.

One month overdue but i was made to invoice them every 2 weeks, so that works out that its been 2 months and 2 weeks since i started the work and that is a long time to have to wait for money.

I'm a new business and a small one and although luckily i can manage past it, it could of destroyed me.

 

[Drpepper]

One month overdue but i was made to invoice them every 2 weeks, so that works out that its been 2 months and 2 weeks since i started the work and that is a long time to have to wait for money.

I'm a new business and a small one and although luckily i can manage past it, it could of destroyed me.

I think that is my point, if it had the possibility of destroying you wouldn't you like to think your suppliers were a bit more understanding than you are, one day you will almost certainly be in their position where you need a bit of extra time.

Now perhaps if you had taken the friendly approach when the invoice was due you just may have received £333 then, £333 a month later and the other £334 in two weeks time, already you would be £666 better off with the rest due soon. As it is you still have nil. Next time, just try that first maybe, you can always go down the "tough" route later if it doesn't work

 

[Vicarious]

Well I hope all you hard nosed business people that call in debt collectors for an invoice that's just 1 month overdue are given a bit more slack and understanding than you are showing here when you hit a temporary cashflow issue. Particularly if £1,000 is such an issue for you, suggests you must be very vulnerable to the exact same issues that face your customer.

Terms are terms and we seem to have this idea (historically) that they are a suggestion. You cant be seen to be soft and usually the other party will respect you for it. If you find yourself in that situation well you will shrug your shoulders and say 'thats business' and deal with it

 

[studiowide]

Well I hope all you hard nosed business people that call in debt collectors for an invoice that's just 1 month overdue are given a bit more slack and understanding than you are showing here when you hit a temporary cashflow issue. Particularly if £1,000 is such an issue for you, suggests you must be very vulnerable to the exact same issues that face your customer.

Yes £1,000 is an issue, £100 is an issue, £10 is an issue. You miss the point. I only pursue this route if I feel I am being mislead, lied to or taken for a ride on 'well overdue' invoices.

Carl.

 

[Drpepper]

Yes £1,000 is an issue, £100 is an issue, £10 is an issue. You miss the point. I only pursue this route if I feel I am being mislead, lied to or taken for a ride on 'well overdue' invoices.

Carl.

I agree, the problem here was it's £1,000 one month overdue and no attempt to come to an agreement was sought, just all guns blazing from the off.

The OP should also realise that these people are HIS customers and as such all amicable avenues should surely be explored first to ensure their continued custom.

 

[yuzi87]

I agree, the problem here was it's £1,000 one month overdue and no attempt to come to an agreement was sought, just all guns blazing from the off.

The OP should also realise that these people are HIS customers and as such all amicable avenues should surely be explored first to ensure their continued custom.

Believe me i am a patient person and i believe in honesty, the company in question has not been honest with me, i know they have been paying other sub contractors while not paying others.

One subcontractor is still owed money after nearly 4 months, we are all being given the run around, directors are leaving left right and centre, I am being fobbed off, their website is suspended and i am worried i will never see my money, and so i think i am in my right to get aggresive and take this further.

 

[Drpepper]

Believe me i am a patient person and i believe in honesty, the company in question has not been honest with me, i know they have been paying other sub contractors while not paying others.

One subcontractor is still owed money after nearly 4 months, we are all being given the run around, directors are leaving left right and centre, I am being fobbed off, their website is suspended and i am worried i will never see my money, and so i think i am in my right to get aggresive and take this further.

I'm sure you correct, and whatever happens I do hope you get your money. Just be cautious when believing what your competitors (which is what this other subcontractor is) tell you.

 

[Steve Thornbury]

Would be happy to help as we will do all the calculations, all the chasing etc whilst you concentrate on your business all on a No Win No Fee basis.
Outsource to a specialist, you would do the same if you had an IT problem!