Hello,
I was self-employed until late last year when I was headhunted, in fact due to being VAT registered my business is still extant though pretty much dormant with the odd transaction going through the books such as renewing domain registrations etc for ex-clients.
One client still owes me a reasonable sum, as of last Autumn they acknowledged that the sum was owed though over the subsequent nine months or so have gone from wanting to discuss terms through questioning whether they actually owe anything to ignoring messages, emails and letters. The last communication was a month ago, a letter from me saying that if I did not hear from them within 14 days I would have to consider what action to take.
I have thought about a solicitors letter, i.e. a slightly bigger stick, the Small Claims Court or Money Claims online.
Any thoughts, experiences or considerations?
Thanks and regards.
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It doesn't sound as if it's going to fix itself, does it? The usual reason for forbearance, which often leads to bigger losses, is an ongoing relationship and the prospect of future profitable business. You don't have that dilemma.
Patience has got you nowhere. Prompt action might mean you make a recovery while others are left empty handed if they subsequently become insolvent.
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Is there an industry specific debt collection agency you could use ? These businesses charge a fee of course but it removes the hassle from you and they are usually quite good at getting results. Better to get something fairly quickly than perhaps nothing over a long time......
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Thanks M, yes I think now is the time to act though it is a question of what action, what is the next step?
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I have used the small claims court with success - you can add court costs and interest to the amount owed. Failure to pay is a blot on the credit record.
You do need to find out first if they can't pay or won't pay.
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AND if you win get it paid to the Court and not to you. Someone else here may advise if this is correct, or a variation of etc!
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Tell them that you've found a 'no win, no fee' solicitor who is willing to take the case on for you and that they will also be liable for your legal costs if they don't pay up!
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Have you any way of ascertaining whether the customer has the means to pay?
Court orders & bailiffs work quite well with the reluctant but they can't get blood from a stone. If they're on the verge of bankruptcy court fees are just going to inflate your losses.
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>>One client still owes me a reasonable sum!!!
How much is a reasonable sum?
There is no point you risking £150 on solicitor/bailliffs with possibility of getting £200 back.
Get a quote from solicitor for letters/court costs and put that against the amount owed - then factor in whether there is money in the debtor to be had.
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i always used to knock on the doors to get some kind of payment
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Even when my dads company was turning over 4 million, he would still thrown on his best suit, jump in the car, drive to the company address and park himself in reception until someone came and saw him.
He always said, the longer you leave it, the less likely you are to get the money and you never know, your cheque may be the last one that doesnt bounce.
I suspect that the only reason this question has been posed is because somebody really cant be bothered to go to too much trouble and wants to know if there is an easy way out, otherwise they would have had this in court a long time ago. Sorry but cmon, get on with it, they have something of yours, go fetch.
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>> >>One client still owes me a reasonable sum!!!
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>> How much is a reasonable sum?
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Nearly £3k.
>>Have you any way of ascertaining whether the customer has the means to pay?>>
They are an active, growing company, there is no question as to whether they can find the money or not.
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...Sorry but cmon, get on with it, they have something of yours, go fetch...
Getting quite demonstrative in his old age, our Stu, but I agree with him.
It's clear the company - for whatever reason - is not going to pay.
'Nearly £3K' is obviously worth chasing, and is classic small claims court/fast track territory.
All I would check is if the small claims procedure is available to a company - yours - wanting to recover money, and not just available to an individual.
I don't think it will be a problem, but even if it is, you can reasonably say the company has wound down and you are dealing with its remaining affairs on a personal basis.
I've no direct experience of the small claims procedure, but those that have seem to speak well of it.
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Small Claims Court, now known as the Small Claims Track of the County Court I think, is the way to go. It doesn't cost much and, if you get a judgement, the loser pays your costs plus, if the bailiffs go in the cost of that is down to the loser as well. If you have a cast iron case you going to get a result, in the end and at minimal cost. I think you can start the process on line at www.directgov.co.uk
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I have sent to the debtors a copy of a completed but unsubmitted Small Claims court form asking if the details are correct. Surprisingly this was effective in a number of cases.
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>> Small Claims Court,
Often the threat of this is sufficient in my experience.
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When I had my computer business, both partners would go in person and claim what was owed if the debt fell outside of terms. In a couple of cases that sent the relationship terminal but generally we were respected for what we did. There was always the underlying issue of pulling our support if debts got old.
Now I'm gardening, I get paid before I leave unless other arrangements have been made. I did have a debt of £250 from a couple who were moving from rented property nearby. As soon as I saw the removal van, I lay in wait for their car, blocked it in their yard with mine and asked politely for my money. After some prevarication (they sent their teen daughter to tell me they weren't in), when the removal van left, Mr. Tenant appeared and offered me a cheque. On my refusal, he legged it for the cash point and came back with some dosh. He wasn't smiling.
Cheddar, go and sit in their office, I suspect they aren't taking you seriously enough. Leave your car in the car park entrance or something. Don't bother with a solicitor's letter, go straight to the small claims. They have thieved your money, don't let them get away with it for your own sake and the sake of other small businesses that might be owed something.
And the very best of luck to you.
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you do of course have the documentation to prove this amount? Contract or written instructions? signed agreed scope of work? signed completion documentation? Not relying on word of mouth are we? (dont give me this "a contract can be verbal" - it cant, no witness then it was never said)
If you have any of this, then its time to start adding interest, and reasonable costs to recover the debt
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What have you done from a tax perspective?
Beware that your trade may have ceased, and you may not now get a tax deduction for the cost against your residual ongoing activity.
Whereas, if you provide against the sum receivable in the accounts where the profit is booked, a tax deduction should be more achievable.
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Owed money, how to proceed? - Manatee
