Owed Money

fattony

Hi

I'm not sure how much help I'm going to get as I think this forum is aimed at helping people who owe money yet I need help with how to resolve an issue where someone owes me money.

We are a Limited company and last October started doing some work for a landscaper, this job took a couple of months to complete and our invoice total was about £3300, the landscaper was a sole trader.

His client refused to pay his final invoice, nothing to do with our work but he didint agree all the extra and wasn't happy with the final invoice value, this dispute has been going on for nearly 12 months and I'm fed up with it.

The landscaper has now got a full time job in another field and says he cant pay until his client pays, I spoke to his client direct and he said the work I had done had been paid for, so the landscaper has had the money and spent it, in total the landscaper was paid over £120k for this job, he was not VAT registered and I don't believe he paid tax on this money but I guess thats another story.

At the moment we are in stalemate he wont pay a thing until his final balance is paid by the client and the client wont pay any more, the landscaper isnt prepared to take him to court as it will cost to much and take to long, where do this leave me? I've asked for a monthly payment plan and he hinted that if we tried the court route then he may go bankrupt - could be a bluff.

His new line of work also seems to be cash in hand as well, so technically he doesnt earn anything, I've spoken to a debt collectionagency who said I'm best off filing for a small claims court but if the guy doesnt have any money it wont get me very far will it? but he is earning on the quiet so he does have money.

If I file the small claims court and he's issued with a letter saying you must pay withing 7 days or whatever and he doesnt what actually happens from there?

If I file a small claims court how long do I have to recover the debt, I heard 6 years max?

Thanks

arcon5

fattony wrote: »

If I file the small claims court and he's issued with a letter saying you must pay withing 7 days or whatever and he doesnt what actually happens from there?

If you get your county court judgement and he refuses to pay he will have a CCJ on his credit report and you have to choose an enforcement option.
Does he own any assets you know off? The court can appoint baliffs to collect assets, but they are apparently toothless!
Does he own property? Placing a charge on that or even threatening to do so might yield results.

Some people get a CCJ but don't enforce it until later down the line when they know the debtor has assetts or is of better financial standing.

If I file a small claims court how long do I have to recover the debt, I heard 6 years max?

No. You can chase a debt indefinately. But if you go 6 years without attempting to chase the debt it is statutory barred and unenforcable. So even a letter every few years is sufficient.

Thanks

Don't worry about him and his client -- that's his business. Your contract is with, so you should be paid irrespective of his client.

He may or may not be bluffing about declaring bankruptcy. But that shouldn't stop you taking it further. It costs a few hundred quid to declare bankruptcy and from what i'm aware your assets are seized (barring those considered to be essentials, suchas clothing, beds, cookers ect), that plus the fact it will significantly affect his future to get out of a debt of just a few thousand quid makes this option EXTREMELY unlikely!

A 'statutory demand' may get results also if he has any assets.

Also, the fact you think he is committing tax fraud could be used in your favour. Maybe hint to him your considering going to HMRC and see if that yields any results. Tax evasion carries some serious penalties.

This guy is trying to scare you out of chasing the money, so don't take the bate, grow a pair and tackle him head on!

Perhaps discuss one final time a payment plan and be explicit in that if he doesn't work with you (make sure he makes a material offer, not something ridiculous like £10/week) you WILL be filing a claim with the county court (it will cost about £35 btw + £55 hearing fee).

pinkshoes

Agree with the above! The final balance issue between him and his client is irrelevant. You've done your work and are owed money.

Definitely small claims court, and it's a really easy process to start, and done on-line. Costs about £30 for the initial stage I think.

You need to send him a "Letter Before Action", highlighting the work you did for him and the dates the work has done. Could you get a written statement from the client saying he's already paid for this work? If you can, include this. Be factual and to the point in the letter, and give him 14 days from receipt of the letter to pay the £3300 owed, otherwise you will have no choice but to take him to the small claims court.

Don't forget to send it recorded or even special delivery, and perhaps even hand deliver a copy too!

If his client owes his a significant amount of money, then it means he can't use small claims court like you can, hence it would cost him more.

halibut2209

arcon5 wrote: »

Don't worry about him and his client -- that's his business. Your contract is with, so you should be paid irrespective of his client.

He may or may not be bluffing about declaring bankruptcy. But that shouldn't stop you taking it further. It costs a few hundred quid to declare bankruptcy and from what i'm aware your assets are seized (barring those considered to be essentials, suchas clothing, beds, cookers ect), that plus the fact it will significantly affect his future to get out of a debt of just a few thousand quid makes this option EXTREMELY unlikely!

A 'statutory demand' may get results also if he has any assets.

Also, the fact you think he is committing tax fraud could be used in your favour. Maybe hint to him your considering going to HMRC and see if that yields any results. Tax evasion carries some serious penalties.

This guy is trying to scare you out of chasing the money, so don't take the bate, grow a pair and tackle him head on!

Perhaps discuss one final time a payment plan and be explicit in that if he doesn't work with you (make sure he makes a material offer, not something ridiculous like £10/week) you WILL be filing a claim with the county court (it will cost about £35 btw + £55 hearing fee).

I agree with this apart from the highlighted section. Don't threaten him! If you think he's committing tax fraud then either report it or don't. But don't talk to the guy about it.

fattony

Thanks guys, he currently doesn't have any assets which is another reason why I've held off the court route, I know he can't pay it and balif's won't get anything out of him, he rents his house, has a van which is leased etc etc.

So if I go down the court route he'll have x number of days to pay, if he doesn't he's issued with a ccj.

From that point I have unlimited time to retrieve the money?

I've sent him letters saying if your disputing the invoice the please write to me, sent it special delivery etc. I'll sent another stating I'll be starting court proceedings etc I've suggested monthly payment plans etc but no joy.

This guy was / is a friend - undecided on that at the moment

arcon5

There is no time limit on trying to recovering the debt. So long as you don't go more than 6 years without chasing. So you can get your CCJ then wait a couple of years hoping his financial standing has improved.

Don't send him a letter asking if he is disputing the invoice. Your just opening yourself up to further complication and delays. Send him a firm lating stating the money owed is overdue and you will be proceeding to the county court in 14 days if it remains unpaid.

garth549

I agree once you have the CCJ wait a while and see what happens.

If he gets a job (ie has an employer) you could request the court to issue an attachment of earnings order. This would force his employer to deduct money from his earnings to repay the debt.

fattony

I'll do the letter tonight!

What's the worst case, could he get my letter which states my intentions and then go bankrupt, doubtful but could he?

Then I have no chance if getting the money?