Sole Trader Debt

abbiekeira

Hello,

Not sure if this in correct section but thought Id ask for a little advice.

I am a sole trader and currently owe one single supplier just under £40k.

I have had £10k worth of boilers stolen and am now struggling to pay my bill. I owe 21k this month and the rest next month.

I asked if I could pay them in installments offering £5000 per month but they said no. They wont chase the debts until they are overdue but the girl said that they would basically take me to court straight away for the full amount.

My question would be if they take me to court and I offer 5K per month would the judge allow that?

I have a flat I am trying to sell at present with 34k equity in it and as soon as that sells I can pay off the debt in full.(assuming it sells)

My morgages are all uptodate, my van finance is paid every month and until now I have never missed a payment. I am fully upto date with my VAT bill and HMRC etc.

I may be able to scrape this months bill but if they are are not interested in taking a payment plan for the other 20 odd K then I would just be delaying it.

Any advice would be appreciated.

I have a house that I just boght for £137,000 paying 26,500 deposit.

I really dont care about the flat, I wpuld be happy to hand that over but I dont want to loose my family home.

Would the judge take into account that I am trying to resolve this?

Thank you

NeverAgain_2

If I read your post correctly, you plan to repay £21K next month, and the remaining £20K at £5K a month.

While it's not possible to accurately predict what a court will say, that appears to me to be a very fair offer and one which should find favour.

I'm surprised the supplier is not prepared to accept it without going to court.

Might be worth speaking to someone higher up their food chain.

Ineedaname

I read it slightly differently in that the OP wants to pay £5k per month for the entire 40k. But either way, I agree with NA that it's a fair offer and the supplier would be stupid to waste money taking you to court.

abbiekeira

Hi,

Thank you for the replies. It would be ideal to pay it al at 5k per month but if the would only agree to 20 then 5 a month that would be a struggle but feesable.

However, if they refuse point blank I was not sure what to do or who to speak too.

I really dont know how it all works but if a court agrees to 5k per month does the supplier have to accept this or can they refuse and still force me to become bankrupt?

Hopefully they will agree or the house will sell and I can just pay them off.

Is the courts desission final if they say that it is okay? Bearing in mind I want to pay it all off as I like the branch I deal with and am one if their good customers. I have always paid 30 days and am never late.

I feel bad about it all but it really was out of my control.

Thanks for the advice so far.

runninglea

By the time this debt becomes due you will have probably paid off a large amount of the debt.

By the time your supplier sends you 7 days letters followed by applying to court etc, you then have 30 days to state your case etc.

You could be a couple of months down the line having paid off 25K.

I would put it in writing of what you are proposing and only if you miss any payments should they then take you to court.

skintandfat

Get a different wholesaler, I told my wholesaler that I was waiting on money coming in

The lady in the office grabbed 3 invoices (middle of October), scores out October and puts November in the date

Then I get 60 days credit - sometimes the cheapest price isn't always the best

I had the same 2 years ago and their answer was 'don't worry- we know you will pay. Pay what you can when you can (with the proviso that the balance came down over a period)

JoePublic

What stage are you at with these guys? I was a Sole Trader myself and experienced something similar, sadly it resulted in me going BR but that was only when i ran up against a multi-national company who wouldn't even contemplate listening to what i considered to be, reason. I offered them a repayment structure but they simply slammed the door and commenced legal proceedings to recover the monies owed. In they end they got nothing, but had they taken my proposal they'd have been repaid in full and i'd still be trading. My debt was caused by two of my own customers crashing and burning, there's a lot of it about squire.

My advice, depending on your relationship with these guys, would be to front up asap. Forget phone calls, simply arrange to see the most important person you can and go to see them, take copies of any proposals with you and, if they accept your offer, have them sign a copy for you to retain. Be sure to work in something relating to continued supply (if you need them) as they may close the door on you and potentially leave you hanging. Obviously i don't know the In's and Out's, but i'd think a reasonable repayment proposal, coupled with a written guarantee of payment once your flat has (eventually) sold, will suffice. Make sure you spell out the alternative to them, accept your offer and get paid, take you to court and risk joining a queue of debtors, potentially only receiving 20p in the pound, if that.

Hope it goes well chap, been there, seen it and it sucks.

abbiekeira

thanks for the replies.

Hopefully it will all work out.

I am still a little uncertian though regarding the courts. If they refuse the 5k per month and it goes to court and the judge agrees to 5K per moth is that final and they must accept it or can they still do anything else?

Sorry to be a pain.

Cheers

debtinfo

yes they could still make you bankrupt, but since there is nothing you can do about that i wouldnt worry about that.

debt_doctor

Hi,
I think, as others have said, that your offer (if you can afford it) is a good one that most reasonable folk would be happy with, unfortunately a lot of trade suppliers are not 'reasonable folk!'

So really you should push your case and start to comply with it, if you can offer the first £5k on time then actions speak louder than words.

If the creditor goes to court there are two methods; try to obtain a CCJ against you or try to make you bankrupt.

The CCJ route would take a couple of months to complete before the court makes a decision (you would fill out form n9a which is that you admit the debt but are asking for time to pay) then the court (based upon your financial statement) will decide a monthly payment or to instruct you to pay in full. There are processess for both sides to vary the courts judgement. If what you are saying is true, then you have nothing to fear from the CCJ process (other than a dent in your credit rating) as you could pay it off very quickly and even if they managed to enforce the debt (following fortwith judgement, ie pay in full) by perhaps a charging order (securing the debt on property) then that would soon be discharged by payment.

The bankruptcy route does hold more danger for you, as the process can be relatively quick. The creditor would issue a statutory demand which really means pay up or ill make you bankrupt. This initial stage costs the creditor nothing, its not seen or sanctioned by the court and is at this stage just a piece of paper, although an indication of potential serious action. Some creditors, especialy trade suppliers use the SD as a threat to make you pay without the intention of making you bankrupt.
If,after 18 days of the SD being correctly served, you have not responded (to their satisfaction, or at all) to the creditors SD, then 3 days later they could apply to the court for a creditors petition. This is the serious stage because the creditor has now paid (approx in fees and solictitors costs) about £1500 to apply for the petition.
It now comes down to the District Judge to decide whether s/he will make you bankrupt. There are no mandatory grounds to dismiss in your case (as far as we know) so it is down to the judges descretion who could consider; a short repayment period, a voluntary charge on your property, decide that the process is flawed, adjourn, do something else or grant the order.
In all honesty, when it gets to a petition stage, if there is nothing of significant value to offer over a fairly tight timescale, the the bankruptcy order would normally be granted.

So, you are now informed of the process you MIGHT face, and knowledge is power, so to speak, but take any action if and when it comes and concentrate on pushing your offer to your creditor.

Good luck.

DD

dancingfairy

Unfortunately you can't really second guess how someone will react. Is it just empty threats to commence legal proceedings or not - we don't know.
I might be tempted to give Business Debtline a call - perhaps they will help with your proposal and maybe give you a few ideas etc.
With regards to the property you are trying to sell with equity in it can you ask for a mortgage holiday while you attempt to sell to free up some cash (I dont' know if this is possible)?
What's the state of your business generally? Are you insured for the stolen boilers and can you use this cash to repay the bill that's due? If your business is in a good state generally (Apart from this blip) then maybe an overdraft/ very short term loan might work? Again all this is stuff that hopefully Business Debtline should be able to advise you on.
Best of Luck
df