Recovering Bad Debt

Thanks for the comments.

I looked into this a bit more. The legislation allows a penalty charge of £70 for the size of invoice I am dealing with. This can be applied only once when the invoice goes overdue at 30 days or anytime within 6 years I think it said. This applies to b2b relationships so that counts me in as a freelancer. I think they don't want anyone trying to use this legislation for consumer wrangles. Because the charge is statutory you don't need to outline it in advance but it is recommended.[ame="http://en.wikipedia.org/wiki/Ignorantia_juris_non_excusat"]Ignorantia_juris_non_excusat[/ame] as they say in Greece.

I also read that if you have a client that regularly pays late then these charges can be allowed to mount up over the years. You don't want to piss them off while they are your customer. If within 6 years they stop being a client you can hit them with all the charges in one go. A nasty thing to do but all legal apparently.

Here are some details.

Bump. Only just overdue but I've got a real sinking feeling about this one. Have looked into charging interest etc as per contract but just got gut feeling the company in question is on the brink of going under.

It's not a huge sum that's outstanding - about 10k but that's the remaining balance from a much larger job. I've paid off our suppliers as we completed the work but it means there's basically no profit on months of work. In fact realistically unless it gets paid we'll be at a loss.

Not interested in charging interest or mediation (they've always been cunts and this is my just desserts at having continued to work with them despite their track recording of paying late literally every time). This one feels like more than just a late payment though so I'm looking for recommendations of debt collectors.

I'd prefer a 'no win no fee' type deal but if they're good and if the fee justifies the return I'd consider flat fee firms.

Take them to court and get a court appointed one?

(He says knowing basically nothing about this).

The Sheriffs Are Coming -
https://www.gov.uk/make-court-claim-for-money/enforce-a-judgment

^This. It’s pretty simple and quick.

Or do what a friend did for some unpaid invoices and called the company as he was boarding a train to their head office, “My train gets in at 10am, if you don’t want your windows smashed and office burnt to the ground by 10.15 then pay me”

They paid, because they knew he actually would do it.

This seems like an upfront cost/effort. I'd rather sacrifice a percentage at the other end so a 'no win, no fee' type private firm seems easier even if it means a bigger percentage lost. Have seen between 15-20% fees payable on success, which I'd accept over losing it all if they go under.

Think this agency give zero fucks. I'm also fairly sure they've moved office without updating records anywhere so wouldn't have any windows to smash. Have been spending more time than I should reading up on them and have seen a new address on a few sites I've not heard of before. It's a flat in a marylebone townhouse, so difficult to get access to smash the correct one. Their duedil stuff still looks OK but they've lost loads of staff recently including a few who have been quite vocal on their various social media sites (the agency, not the personal ones - I haven't gone that dark yet).

From memory the county court judgment upfront cost on 10k is about £450. You can add interest to your claim too.

That service saved my ass on a few occasions and is super simple to file a claim. Literally 5 minutes work.

OK, thanks - might suck up the up front costs then. Though I was reading there could be additional (still high-ish costs) if more services are needed, like enforcement etc which made me think just go private in the first place and let them do it all.

Is it effective against companies that are at risk of going into administration? Or ones that are already there? Ones that have little in the way of assets, loads of debt, no cash at the bank etc?

I was an employee at a company that went under years ago and it wasn't fun to watch the freelancers get completely overlooked during the administration process while they tried to flog a few office chairs and what remained of the server equipment the editor hadn't stolen when he got wind of administrators being brought it.

Is it effective against companies that are at risk of going into administration? Or ones that are already there? Ones that have little in the way of assets, loads of debt, no cash at the bank etc?

(ianal)

If there's no money, there's no money. No matter what route you go that won't change. For £10k it's not going to be worth going after the directors either.

No-win/no-fee debt collectors are going to ask/look into their solvency and assets. Their response will give you a guide as to you whether it's worth it.

They may have other tricks to increase their chances of recovery.

One thing you can also look at is a statutory demand and winding up petition. If the debt is uncontested this will ultimately allow you to wind the company up if they don't pay. It's a more aggressive tactic, with fixed time limits and often doesn't require all the back and forth a normal claim would. If they're sloppy and don't respond as prescribed it tends to work in your favour, whereas a regular claim can often be the opposite.

^ this might be the winner. Am speaking to a friendly solicitor this afternoon for advice on 'serving' it. Particularly as I'm not sure if the director is still based at the office I've been to.

This all just seems like such a fucking ballache.

https://www.gov.uk/apply-to-bankrupt-someone/check-for-other-bankruptcy-petitions

That I have to arrange a trip to London to deliver / make checks blah / potentially register as a creditor if someone has pipped me to the post / proof of debt form etc. Ugh. Ugh, ugh, ugh.

serving

It goes without saying a stat demand has to be served properly. But if it is all done correctly and the recipient doesn't see and action it as soon as they should (through their own fault) it isn't a bad thing.

I feel for you though. It's shit.

Just try and distance yourself and treat it like a project - it's very procedural, map out your timelines and checklists then don't worry about it.