Paying a bill to a company that is in administration

tcall

Sorry to sound daft, but if i have a bill to pay but the company i owe has now gone into administration, am i still obliged to pay it?

Bossyboots

Yes you are.

tcall

Fair enough. I was just looking at it from the other side, whereby if the company in receivership owed ME money, I wouldn't necessarily get it!

Astaroth

Yes you still owe them and if it is in administration due to financial difficulties (which isnt the only reason why administrators may be called in) then receivers tend to be much more astute in charging late payment fees and calling debt collectors now that the ower rather than owed pays their fees.

WHA

In my experience, company administrators and receivers can be remarkably lax and lazy about collecting debts. Sure, you'll get statements, reminders and maybe debt collector/solicitor letters, but these are churned out by administration assistants according to what the company books show to be owed.

There are plenty of options for not paying - such as claiming the goods never arrived, claiming the goods or services were sub-standard, claiming the invoiced price was not as agreed, etc. In most cases, the company's staff will have been made redundant - the administrators/receivers won't know where to look for supporting documents and may not even understand the product or service.

Sometimes they will take the lazy option of not pursuing you if you can produce a counter-claim against the invoice or formally dispute the invoice. The only thing they can do is take you to court for recovery of the debt, but they can't do that if they can't "prove" you owe the money.

In a spectacular case I was involved with the sales ledger (record of money owed to the company) showed that debtors were something like £200,000, but the receivers statement showed only £10,000 was recovered (which co-incidentally was their fee - no-one else got anything!)

I would recommend that you check your records to carefully to make sure that the invoices they say you owe are correct, pricing correct, quality correct, etc., and that if you have any grounds for dispute, then you write to the receivers/administrators accordingly with your reasons for non payment.

inmypocketnottheirs

WHA wrote:

I
In a spectacular case I was involved with the sales ledger (record of money owed to the company) showed that debtors were something like £200,000, but the receivers statement showed only £10,000 was recovered (which co-incidentally was their fee - no-one else got anything!)

I think you will find that is more than not often the case with liquidators. They are parasites picking the meat off the bones, who just make sure they get paid.

cash99

You are obliged to pay them, but post administration they are unlikley to be obliged to provide any returns facilities, warranty support, annual rebates etc. If this is an issue then before payment is the time to resolve it.