Debtor Client lacks capacity to pay invoice

[TFS]

We run a Home Care agency. 6 months ago, a client had a bad fall, and has been in hospital or a care home since. We have several large invoices outstanding (for their Home Care costs), but since their fall, they no longer have capacity to manage their affairs.

The client is a home-owner with no family, and no debts. Apart from waiting for them to pass away and probate to kick in, or applying for a deputyship, what other means do we have of recovering our outstanding debt?

We do not want to put the matter into the hands of the county court, as that is more intended for someone who WON'T pay. However, if that is the only route, then we will reluctantly have to take it.

 

[Paul Kelly ICHYB]

And if they cant manage their affairs before a court order, they will after?

What has your solicitor said when you asked them?

Or have you spoke to a debt collection agency for advice?

 

[Mr D]

Court guardianship? Through MoJ, court handles their affairs.
If they cannot handle their own affairs then really social services should be handling the court action for them.
Not simply left for bills to accumulate.

You know they cannot handle their affairs - presumably someone informed you. Have a word with local social services and pass message on.

 

[TFS]

We retain a solicitor for personnel matters, but have never had anything else where we needed legal advice. Waiting to speak to a family law solicitor who acts as Deputy for another client.

A Debt collection agency can't do anything. There is money in the bank, but the client cannot even sign a cheque. Not that I know where they are ATM - It's either a Care Home, or a hospital.

As I said in my OP, I can't see any point in subjecting them to CC.

There is NO family whatsoever, and no POA.

 

[TFS]

@Mr D - Local SS were told 4 months ago, but seem to be dragging their heels....

We are concerned on the client's behalf. Winter is coming, and there is no heat on in the house. It will be getting damp. House could be subject to water damage etc etc. Not to mention other bills which could be piling up.

 

[Mr D]

@Mr D. - Local Social Services know, but seem to be dragging their heels....

Until someone applies to the courts and gets protection for the person then you will have to wait for your money.

 

[obscure]

To be frank it sounds like taking them to court would actually be the best option. It would force social services (or whoever) to step up and start acting on this person's behalf and get some progress towards you getting paid.

 

[Alyson Dyer]

Deputyship is your only choice. The local authority will apply if there are no relatives willing to do it. Does he have a social worker? If you threaten to end his tenancy they will soon spring into action as they will have to rehome him and that will cause them hassle.

 

[TFS]

Thanks Alyson.

The client is not a tenant - They were living in their own home. We are a domicilliary care agency, not a care home.

I am chasing SS to find out whether or not they have started proceedings for a deputyship. Unfortunately, that could take 6 months or more to set up.

 

[Alyson Dyer]

Six months would be quite swift! Deputyship applications are part of my day job, 9 months would be more like it.

 

[Big G]

Hi TFS,

What do your terms and conditions say regarding unpaid invoices and when situations like this arise?

Might be best issuing the claim and then securing the judgment on the property via charging order. Very difficult situation though as you may struggle to confirm service of any documents.

 

[Alyson Dyer]

That won’t help get the money though as no one can access the debtor’s bank account.
I have a client applying for a deputyship for her father for the sole reason that she cannot stop his direct debits that pay the utilities on a property he no longer lives in and never owned!
My advice to everyone, every day, is set up Lasting Powers of Attorney while you are fit and well.

 

[TFS]

T's & C's are irrelevant now. The money is owed, and will EVENTUALLY get paid. The problem is that there is no-one who can authrise the payment at the moment, and we need to pay our staff.

 

[Mr D]

T's & C's are irrelevant now. The money is owed, and will EVENTUALLY get paid. The problem is that there is no-one who can authrise the payment at the moment, and we need to pay our staff.

Unfortunately your cashflow issues aren't going to be solved by this guy's money any time soon. If relevant order has been applied for then its working its way, if its not been applied for then looking summer.

Not sure whether factoring could work. May be a long shot or even impossible.

 

[Alyson Dyer]

Shutting the barn door when the horse has bolted I know but we advise all care givers like yourselves to ask about Lasting Powers of Attorney when they take on a new client. It gives you information and brings the subject to the client and his family, many of whom have never heard of LPAs. This gives them a chance to plan ahead snd save both themselves and you a lot of money.
Making LPAs is much cheaper and easier than applying for a depityship.

 

[TFS]

We had looked at Factoring, but the profit margins in Domicilliary Care are so low that paying factoring costs of anywhere between 0.5% and 5% are just not realistic. With only 60 or 70 invoices a month, the rates are going to be towards the top of that scale.

Some of are clients are on what is called "Direct Payments" - where the LA pay for their care (Sometimes with a contribution from the client). This money is held in an escrow a/c, and the clientauthrises the payment directly to OUR bank and ONLY our bank. Since most invoice factoring companies insist on ALL invoices being factored, and the payment issues apply to very few clients, it is not a viable option.

 

[smallclaimsassistance]

I'm afraid this is one of those cases where YOU need to instruct solicitors, rather than look for free legal advice here. Yes it will cost, but this is a Court of Protection problem, and is not a legal problem you can sort out for yourself.

Dean