Recovering money owed to a business
Discussion
I have a client that has 3 outstanding invoices as follows:
1 - £8,000
2- £6,000
3 - £10,000
Note Invoice 1 was sent from my company when it was not limited.
As such i assume that the recover of money will be split into 2 seperate claims, as the last two invoices were from a limited company.
The invoices are well overdue.
Invoice 1 over a year
Invoice 2&3 over 6 months.
The work was for preparing and submitting two seperate planning applications.
Chased several times and had a variety of verbal exscuses.
Emailed the invoices and payment requests periodically.
They have made two payments as follows:
£2,000 paid against invoice 1
£2,000 paid against invoice 2
I dont want to go through the hassle and cost of employing a collections agency as i believe they dont have much power from my limited viewing on TV.
The debtor is a large company, and i assume it maybe best to go straight to court given the lenght of time money has been owing.
The payments received and no complainst etc would i assume make clear that the work carried out is satisfactory.
I then understand if you get a court ruling in your favor you then need to seperatley get a court to enforce the order?
Is this the right stratergy?
Ive been very fortunate to date in that people have always paid, and i have now implemented a new payment stratery to get the money prior to completing the work. So hopefully no future issues.
Any advice appreciated
1 - £8,000
2- £6,000
3 - £10,000
Note Invoice 1 was sent from my company when it was not limited.
As such i assume that the recover of money will be split into 2 seperate claims, as the last two invoices were from a limited company.
The invoices are well overdue.
Invoice 1 over a year
Invoice 2&3 over 6 months.
The work was for preparing and submitting two seperate planning applications.
Chased several times and had a variety of verbal exscuses.
Emailed the invoices and payment requests periodically.
They have made two payments as follows:
£2,000 paid against invoice 1
£2,000 paid against invoice 2
I dont want to go through the hassle and cost of employing a collections agency as i believe they dont have much power from my limited viewing on TV.
The debtor is a large company, and i assume it maybe best to go straight to court given the lenght of time money has been owing.
The payments received and no complainst etc would i assume make clear that the work carried out is satisfactory.
I then understand if you get a court ruling in your favor you then need to seperatley get a court to enforce the order?
Is this the right stratergy?
Ive been very fortunate to date in that people have always paid, and i have now implemented a new payment stratery to get the money prior to completing the work. So hopefully no future issues.
Any advice appreciated
mikebradford said:
I
I dont want to go through the hassle and cost of employing a collections agency as i believe they dont have much power from my limited viewing on TV.
The debtor is a large company, and i assume it maybe best to go straight to court given the lenght of time money has been owing.
The payments received and no complainst etc would i assume make clear that the work carried out is satisfactory.
I then understand if you get a court ruling in your favor you then need to seperatley get a court to enforce the order?
Is this the right stratergy?
Is it a company that is solvent/with assets. You can get an idea from looking up the company on companies house beta and downloading the latest accounts. If the company is teetering on insolvency then you will be throwing money down the drain. I dont want to go through the hassle and cost of employing a collections agency as i believe they dont have much power from my limited viewing on TV.
The debtor is a large company, and i assume it maybe best to go straight to court given the lenght of time money has been owing.
The payments received and no complainst etc would i assume make clear that the work carried out is satisfactory.
I then understand if you get a court ruling in your favor you then need to seperatley get a court to enforce the order?
Is this the right stratergy?
Possibly the most effective instrument at your disposal that will get their attention is a statutory demand.
Don't assume all insolvency practitioners have no teeth. For example this is an option which could be effected;
https://www.gov.uk/wind-up-a-company-that-owes-you...
https://www.gov.uk/wind-up-a-company-that-owes-you...
2 "final demand" letters sent recorded to the Company Sec. Be short and clear
Show date of offer, acceptance and completion of the contract.
Make note they have already paid some of the bill (this helps your case a lot).
Give them 14 days to pay the balance or you will be taking legal action which will add fees and interest to the sum owing.
Once you send the letters and they have been signed for follow up with an email stating the same things and requesting payment and noting that the letter has arrived and been signed for.
Wait 14 days and report back.
(IANAL!)
Show date of offer, acceptance and completion of the contract.
Make note they have already paid some of the bill (this helps your case a lot).
Give them 14 days to pay the balance or you will be taking legal action which will add fees and interest to the sum owing.
Once you send the letters and they have been signed for follow up with an email stating the same things and requesting payment and noting that the letter has arrived and been signed for.
Wait 14 days and report back.
(IANAL!)
I'd be careful to stay within the £10k Small Claims limit otherwise it can be very costly to pursue, so split them up.
Make sure you follow the pre-action protocols ://www.justice.gov.uk/courts/procedure-rules/civil/protocol otherwise your claim can be dismissed/compromised.
Make sure you follow the pre-action protocols ://www.justice.gov.uk/courts/procedure-rules/civil/protocol otherwise your claim can be dismissed/compromised.
mikebradford said:
I have a client that has 3 outstanding invoices as follows:
1 - £8,000
2- £6,000
3 - £10,000
Note Invoice 1 was sent from my company when it was not limited.
As such i assume that the recover of money will be split into 2 seperate claims, as the last two invoices were from a limited company.
The invoices are well overdue.
Invoice 1 over a year
Invoice 2&3 over 6 months.
The work was for preparing and submitting two seperate planning applications.
Chased several times and had a variety of verbal exscuses.
Emailed the invoices and payment requests periodically.
They have made two payments as follows:
£2,000 paid against invoice 1
£2,000 paid against invoice 2
I dont want to go through the hassle and cost of employing a collections agency as i believe they dont have much power from my limited viewing on TV.
The debtor is a large company, and i assume it maybe best to go straight to court given the lenght of time money has been owing.
The payments received and no complainst etc would i assume make clear that the work carried out is satisfactory.
I then understand if you get a court ruling in your favor you then need to seperatley get a court to enforce the order?
Is this the right stratergy?
Yes, you will need to start Small Claims procedure. The first step is to write to the debtor telling them that unless full payment is received by (14 days), you will commence Small Claims procedure.1 - £8,000
2- £6,000
3 - £10,000
Note Invoice 1 was sent from my company when it was not limited.
As such i assume that the recover of money will be split into 2 seperate claims, as the last two invoices were from a limited company.
The invoices are well overdue.
Invoice 1 over a year
Invoice 2&3 over 6 months.
The work was for preparing and submitting two seperate planning applications.
Chased several times and had a variety of verbal exscuses.
Emailed the invoices and payment requests periodically.
They have made two payments as follows:
£2,000 paid against invoice 1
£2,000 paid against invoice 2
I dont want to go through the hassle and cost of employing a collections agency as i believe they dont have much power from my limited viewing on TV.
The debtor is a large company, and i assume it maybe best to go straight to court given the lenght of time money has been owing.
The payments received and no complainst etc would i assume make clear that the work carried out is satisfactory.
I then understand if you get a court ruling in your favor you then need to seperatley get a court to enforce the order?
Is this the right stratergy?
This then opens the battlefield.
1) The debtor might think 'Oh s
t he actually means it' and send the money. Battle over.2) He might suddenly invent reasons why he didn't pay you, eg your work was no good etc.
3) He might do nothing.
And so for 2 or 3 you then do the Moneyclaim Online as mentioned, and read every requirement scrupulously. Don't leave any loopholes that might get exploited by a wily adversary. Your evidence is the written word; ie all letters, emails and texts that have passed between you. Photos and video too, if any. Verbal stuff is irrelevant.
The ball is now in the debtor's court.
1) He might think 'Oh s
t he actually means it' and send the money. Battle over.2) He might defend the case, and/or counter-claim with reasons why he didn't pay you.
3) He might do nothing.
And then a court date will be set.
He might:
1) Pay up the day before. Battle over.
2) Not turn up - in which case you win by default.
3) He might turn up and defend, in which case you'll need a cool head.
IF your evidence is in apple-pie order you will win, and the defendant will have X days to pay or get a CCJ. The problem is that he might have a wall full of CCJs, and be quite happy for another to add to his collection. You then have to enforce the CCJ, and in my experience the best way to do this is to escalate the case to the High Court (but save that for later, you need the CCJ first).
So you see, there are many ways it can go, so you have to be ready for all of them, and maybe others you didn't expect, and also to be ready for a long fight, perhaps 2-3 years. But IMHO the amount owing makes it well worth while.
So, review all the communications you have, select which parts are relevant to the case, and use that for your claim. Keep it factual, succinct, no waffle, no emotion. Good luck!
Edited by Simpo Two on Tuesday 12th July 16:01
wattsm666 said:
Go for a money claim on line for one of invoices and then get a CCJ. That will make them wake up unless they are on the brink.
Cheap to get and will affect their credit rating so they will want to avoid.
Been a long time since I've been involved with credit control, but I know someone who would fill out the form and email a copy over to the debtor before submitting it, often that would be enough of a nudge and get them to pay up.Cheap to get and will affect their credit rating so they will want to avoid.
Zetec-S said:
Been a long time since I've been involved with credit control, but I know someone who would fill out the form and email a copy over to the debtor before submitting it, often that would be enough of a nudge and get them to pay up.
Anything you can do to get the money without going to court is worth trying (withe the exception of paying money to a third party like a collection agency). It all comes down to how determined the debtor is not to pay. I had one who dug in like a Japanese soldier on Iwo Jima.Edited by Simpo Two on Tuesday 12th July 18:16
Thanks for the advice to date, it's appreciated.
I note someone stated to keep the claims under £10k
All the figures I quote are plus VAT.
So potentially 3 separate claims, one for each invoice.
Is this £10k limit reffered to significant?
MustangGT said:
By your statement invoice 1 was before your 'company' was limited do you mean you were a sole trader? A company is a specific legal entity, a sole trader is you personally. If this is the case you have two separate claims, one from you personally and one from your company.
You are correct, and I had assumed it would be 2 separate claims because of this.I note someone stated to keep the claims under £10k
All the figures I quote are plus VAT.
So potentially 3 separate claims, one for each invoice.
Is this £10k limit reffered to significant?
You have a claim and your company has a claim. They are separate.
Please look at/ google statutory demands. It’s been mentioned a few times and this is your next step.
Basically, if these are undisputed debts, they have to pay up or face an application to be wound up.
No big solvent company wants that. It causes havoc.
I also think you need to pay for advice - find a reputable solicitor skilled in debt collection.
Please look at/ google statutory demands. It’s been mentioned a few times and this is your next step.
Basically, if these are undisputed debts, they have to pay up or face an application to be wound up.
No big solvent company wants that. It causes havoc.
I also think you need to pay for advice - find a reputable solicitor skilled in debt collection.
Use these guys:
https://lovetts.co.uk/uk-debt-recovery/letter-befo...
They are cheap effective and will make sure you don’t fall foul of procedure etc. Great easy to use claim tracking website too. They are 100% worth the relatively small fees they charge. No association btw - we just use them a lot.
https://lovetts.co.uk/uk-debt-recovery/letter-befo...
They are cheap effective and will make sure you don’t fall foul of procedure etc. Great easy to use claim tracking website too. They are 100% worth the relatively small fees they charge. No association btw - we just use them a lot.
mikebradford said:
Is this £10k limit reffered to significant?
It's the Small Claims limit.'Small Claims' is a process designed for Joe Punter - ie you - to go to law and fight a case without hiring professionals (who will charge you a very great portion of the sum in hand). Everything is explained in detail as you go, and the judge - if it gets that far - will make allowance for the fact you're not a QC. It comes down to facts, evidence, and what is reasonable.
Austin_Metro said:
Please look at/ google statutory demands. It’s been mentioned a few times and this is your next step.
Basically, if these are undisputed debts, they have to pay up or face an application to be wound up.
So they will dispute them... and if the company is wound up, the OP certainly won't get paid.Basically, if these are undisputed debts, they have to pay up or face an application to be wound up.
Austin_Metro said:
I also think you need to pay for advice - find a reputable solicitor skilled in debt collection.
Sorry but I disagree - you will just end up spending thousands more. As said, Small Claims is for amateurs, and as long as you have a decent IQ and patience you will do just as well. I hear that judges in small claims cases don't think much of solicitors in court.Simpo Two said:
Sorry but I disagree - you will just end up spending thousands more. As said, Small Claims is for amateurs, and as long as you have a decent IQ and patience you will do just as well. I hear that judges in small claims cases don't think much of solicitors in court.
This.We had a situation going into covid with a very large business refusing to pay out on the contract they had inherited from an acquisition we had been providing services to. I spent a few thousand with Shoosmiths getting nowhere against their retained barrister so decided to do the job myself and filed a number of small claims (each just under the £10k limit). The defending company didn’t file a response (I think due to incompetence and people wfh having a jolly). A couple of days after the deadline we were awarded the claim, I then got the call to ask if they paid up would we cancel the CCJs asap.
If you have proof of the debt and proof you have followed the steps of being reasonable before making a claim it’s a good way to deal with those who don’t like paying their bills with little cost.
And dont forget you can add interest and some costs for your time dealing with the matter.
Simpo Two said:
Sorry but I disagree - you will just end up spending thousands more. As said, Small Claims is for amateurs, and as long as you have a decent IQ and patience you will do just as well. I hear that judges in small claims cases don't think much of solicitors in court.
Sorry but I disagree with a number of things that have been said - not just by simpo. But I’m summary: First, I think OP does need a steer, for instance he was not sure that he had a personal claim and one for his company.
Second, I think a statutory demand is appropriate. Any well capitalised business does not avoid a small debt by allowing themselves to be wound up. Close your whole business to avoid 20k?
Third, the amount for a stat demand is over 750 quid claiming against a company and 5,000 against an individual.
Fourth, if you are going to dispute it you need to provide sworn evidence. Yes, there are plenty of people out there that would lie to avoid a 20k debt … but would I lie so that my company could delay paying. No. I wouldn’t.
Fifth, I wasn’t talking about small claims. The OP needs to spend a few hundred quid for advice on undisputed debts. He doesn’t need to go to the trouble of small claims yet.
Sixth, they’ve also part paid and given excuses for non payment. Depending on those reasons they’ve likely admitted these debts.
vikingaero said:
mikebradford said:
I
I dont want to go through the hassle and cost of employing a collections agency as i believe they dont have much power from my limited viewing on TV.
The debtor is a large company, and i assume it maybe best to go straight to court given the lenght of time money has been owing.
The payments received and no complainst etc would i assume make clear that the work carried out is satisfactory.
I then understand if you get a court ruling in your favor you then need to seperatley get a court to enforce the order?
Is this the right stratergy?
Is it a company that is solvent/with assets. You can get an idea from looking up the company on companies house beta and downloading the latest accounts. If the company is teetering on insolvency then you will be throwing money down the drain. I dont want to go through the hassle and cost of employing a collections agency as i believe they dont have much power from my limited viewing on TV.
The debtor is a large company, and i assume it maybe best to go straight to court given the lenght of time money has been owing.
The payments received and no complainst etc would i assume make clear that the work carried out is satisfactory.
I then understand if you get a court ruling in your favor you then need to seperatley get a court to enforce the order?
Is this the right stratergy?
Possibly the most effective instrument at your disposal that will get their attention is a statutory demand.
Go on Bar Direct and find a good but fair priced Barrister and all the while assuming the debtor is good for the money
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