Owed money - how can I get them to pay before they go bankrupt?

Bounceback

We are owed money by a company, they have informed us they are unable to pay at present. They are looking for investors and if they get them they will be able to pay.

I think the company is going to end up bankrupt. Is there anything I can do at this stage to get the money owed before they go under?

I have spoken to the director of the company who was unaware of even who we are, I have asked him to put us at the top of his payments list. I feel very powerless.

Thank you for reading this.

texranger

You could send them an letter before action (LBA)

Pennywise

You're probably just one of many who are asking to be put on top of the pile. You need some leverage to make them pay you ahead of the others. If they're already on the edge of bankruptcy, going legal is fairly pointless as it won't get you paid in preference to the others.

So, think of ways to leverage them.

Would it "hurt" them if you stopped supplying them with goods & services?

Can you reclaim and stock or equipment that they're holding for which they haven't paid you?

Can you put a stop on ongoing services (i.e. if you're a website provider, can you pull the website off the internet)?

Or more importantly, can you threaten to suspend services or take back goods to make them sit up and take you seriously?

Also, make sure that things don't get worse - i.e. sell nothing else except on "cash on delivery" payment terms or payment in advance.

Bounceback

Thank you so much for your responses. We supplied transport services for the company, so it is not something we can take back. They deal in medical equipment (assets I guess), and have been paid late by the healthcare companies they deal with. They moved to factoring a while ago, which slowed our payments down. We have stopped working for them now.

If they do go under, I fear we will get nothing. So far we hadn't put through the fine & interest we are due under the Late Payment of Commercial Debts (Interest) Act 1988. I'm just doing a letter with that in, and as we invoiced per job that is a lot of £40 fines. Which may be a lot of nothing at the end of the day.

Thanks again for your help. It is scary, and to us a lot of money. I'm hoping they get an investor and can pay us.

paddyrg

I wonder if they have any assets you can kidnap? I can't imagine it'd be legally right, but posession is 9/10th's, you may find it helps them to pay you off ahead of others?

Or can you offer them a discount for a full and final settlement if made within 7 days (so you may get something ahead of nothing at all)?

nomoneytoday

paddyrg wrote: »

I wonder if they have any assets you can kidnap? I can't imagine it'd be legally right, but posession is 9/10th's, you may find it helps them to pay you off ahead of others?

Or can you offer them a discount for a full and final settlement if made within 7 days (so you may get something ahead of nothing at all)?

The first could end up with the OP being arrested

Premier_2

Bounceback wrote: »

We are owed money by a company, they have informed us they are unable to pay at present. They are looking for investors and if they get them they will be able to pay.

I think the company is going to end up bankrupt. Is there anything I can do at this stage to get the money owed before they go under?

I have spoken to the director of the company who was unaware of even who we are, I have asked him to put us at the top of his payments list. I feel very powerless.

Thank you for reading this.

You can't get blood out of a stone, and if they have no money they will go bankrupt (or you could force them to)

Ensure you have made a formal demand, and if they do go bust ensure your demand is known to the receiver. If there is anything left you will get your proportion of any remaining funds.

Too late for this occassion, but to avoid this happening again, have a review of your credit granting facilities and if in doubt, don't provide credit - strictly cash up front or at worst on delivery.

Bounceback

Thank you for your advice. Unfortunately it looks like we won't get a penny.

I am very frustrated that companies can go under, buy assests for £1 and start up again. It isn't right that we have been left having paid expenses to provide a service and won't see a penny. We needed that money and cannot afford the loss.

Thanks again.

greyteam1959

Now for some good news Bounceback m8.............
If there is VAT involved you can get that back from HMRC..........
HTH

jenand8285

texranger wrote: »

You could send them an letter before action (LBA)

I agree with texranger. The company/ solicitors we use to send our LBA's only charge £2 + VAT and they are worth every penny! In the past 2 years out of approx 15 letters we have sent only one has gone to court proceedings. We try and avoid sending them as it can hinder relationships, but if you suspect they have cash flow problems then they are not really a customer you want.

jenand8285

mervyn11 wrote: »

Now for some good news Bounceback m8.............
If there is VAT involved you can get that back from HMRC..........
HTH

Not till about six months down the line. I think you have to exhaust the chasing methods first before writing off.
If they are going into administration and you are wanting to put in a claim, I would think you would have to wait and see what you receive (if anything) and then put in a relief claim for the balance.