- So you found the customer (or they found you)
- You carried out due diligence, credit reports, checked who you would be trading with, got agreement on price and to start work etc. (You did didn’t you?)
- Carried out the work to your usual high standard and sent the invoice.
- Now all you need to do is sit back and wait for the cheque, bank transfer etc
But wait is the operative word here! The customer has went beyond the credit terms agreed (you did agree credit terms didn’t you?) and you asked for payment, phoned, sent emails, sent letters, tried to shame them on LinkedIn.
Then, the debtor starts to ignore you and you discover they now have County Court Judgements (ccj) or Scottish Decrees (judgement ) what to do?
- Write the debt off and take the hit knowing you can at least claim the VAT back?
- Refuse to give up? In which case your options are:
- Issue a county court claim form, get judgement, transfer to the high court and send the sheriff’s officers around to collect the debt. Sounds like a plan BUT hold on, what about costs? Are you throwing good money after bad? Remember the debtor has unpaid CCJ’s or decrees is this the best option?
- You could pass it to a debt collection business, they will phone, email, send letters and advise the debtor of the impact on their credit rating. BUT hold on, you tried phone calls, emails, letters, LinkedIn, they have CCJ’s or decrees impacting on their credit rating already. Is this the best option? Sure it is no win no fee (don’t collect you don’t pay up to 20% of the debt) but will the debtor ignore a collection agency? Are they worried about their credit rating now? OK maybe a different approach then!
- You could try a winding up petition and they may well pay the debt, interest, compensation and costs on receipt, but what if they don’t? You have paid out £280 court fees and £1,350 deposit plus solicitors fees. (if you use solicitors).
So you proceed to have the company wound up but you know from your due diligence (remember that due diligence you done? You did do it didn’t you?) that there is little in terms of assets. You are also aware through the self same due diligence of total liabilities in the last accounts (which will probably have increased) and CCJ’s or decrees that there are other creditors who are going to want a slice of the action!
So now what? Maybe a winding up petition is not the best option and it is back to square one and write off the debt.
Hey hold on though!! What if there was another option? An option that carried less risk, an option that could obtain payment within 7 days? (no guarantee if debtor is in a dire financial situation) An option that could cost less than £300, (or put you in profit if paid) an option that would claim those costs from the debtor, claim interest and late payment compensation?
That option is there and can be very effective at collecting your debt.
So why continue to wait, hope, worry and waste time and money?
This option has an 81% success rate in collecting the debt, interest, compensation and costs. Interestingly where this option does not result in payment then the chances of successfully collecting is low. Only 11% of cases that went beyond this option were successful.
Ask us about this option as it may well just get you your hard earned cash!
Written by JMS Credit Consultancy
Written by JMS Credit Consultancy
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