*URGENT* My employers are about to go bankrupt. And I'm owed £7K, and have no money o

Locogooner

Basically I !!!!ed up.

I joined a startup boutique brand as head videographer last year.

There is a much longer story about their inability to pay me on time, disorganisation with shoot but the main thing I'm dealing with here is the strong possibility that the company is going bankrupt.

I was last paid my wages in October and I have not received much since. The contract ended on December 31st.

I'm still owed £7000.

The MD now tells me that the large investment they were expecting from one of the main investors, is no longer going to happen.

He's now saying that, they can only pay back in installments. Considering I haven't received any sort of wage for the past three months, installments of £150 every few weeks does very little for me.

It would probably take several months for me to receive full amount. And that's if they manage to stay afloat till then.

They are heavily in debt, but are still hiring staff to continue trading and keep business afloat.

I have everything on contract that we should be paid and the company does agree. However, he has started to complain that I didn't work enough.

He says that if I had done more shoots, the company would have made more money by selling more clothes.

The contract stated I worked when I'm called upon so seems like he's just looking for someone to blame.

The other issue here was that it was a contractor's contract but the directors insisted I was an employee. I didn't provide them with any tax / NIS information but director said I was getting paid a 'salary'.

So I never invoiced but didn't receive a payslip either. I just received money into my bank account each month (well the first 3 months before they didn't anymore)

I wasn't an employee though.

Now, the main issue is that they seem not to have the funds OR they are prioritising who they send money to first and how much.

He told me last week there's only £200 in the company account. For too long they've been relying on investment money but now investors are pulling out. They have a very very low credit score and haven't filed accounts since March 2015.

Aside from the verbal abuse and accusations I've received from him, he's still insisting that I keep waiting and waiting despite the fact money has been owed for such a long time.

I'm running low on my savings (very very low) and am currently looking for work but what can I do about this?

I'm currently looking at using a debt collector.

Really, really urgent advice needed.

stator

Skip the debt collector, just send the company a letter before action (do your research online) and then take them to small claims court.
If you win the case and they want to stay afloat they will have to pay you.
If they can't pay you what the court orders them to pay then they will have to file for bankruptcy.

System

stator wrote: »

If they can't pay you what the court orders them to pay then they will have to file for bankruptcy.

No, they'll just have another CCJ added to the list.

agrinnall

It could be better if you could prove that you were in fact an employee, because if the do go bankrupt you would then be redundant and if they don't have the money you are owed you would get at least some of it from the government instead.

https://www.gov.uk/your-rights-if-your-employer-is-insolvent/claiming-money-owed-to-you

Locogooner

agrinnall wrote: »

It could be better if you could prove that you were in fact an employee, because if the do go bankrupt you would then be redundant and if they don't have the money you are owed you would get at least some of it from the government instead.

MD is claiming they aren't insolvent because they're slowing paying debts.

agrinnall

Locogooner wrote: »

MD is claiming they aren't insolvent because they're slowing paying debts.

Well, I'm only going on what you said in the thread title, if that's not correct perhaps you should edit it to avoid confusion.

da_rule

If you decide to make a claim at court and you can prove that they owe you more than £5,000 then you could petition for them to made bankrupt and they would have to prove they are solvent.

There are a number of negatives:
1) If they admit the debt or are found liable then a payment plan could be imposed by the court
2) If they do not pay/cannot pay and you do succeed in having them made bankrupt then any money they have will first be paid to secured creditors (mortgages etc), then to the receivers to cover their fees and then to preferred creditors (including employees), then if there is any money left in the pot it will move down to unsecured creditors, such as yourself.

Locogooner

agrinnall wrote: »

Well, I'm only going on what you said in the thread title, if that's not correct perhaps you should edit it to avoid confusion.

Going by the legal definition, they are insolvent though.

They currently are unable to pay off debts in full.

Bogalot

You are in a no win situation. If you go to small claims they'll allow the respondent to pay you in instalments if that's all they can afford, so as they're willing to do that anyway you've not gained anything.

Have you tried to negotiate a higher amount? That's all I can suggest that will get you the money any faster.

Very frustrating, but this is always a risk with self employment.

paddyrg

Maybe point out that trading whilst insolvent is likely to make the director liable http://www.pitmans.com/directors-toolkit/home/restructuring-insolvency/can-i-be-personally-liable-if-my-company-trades-whilst-it-is-insolvent/ and they may be 'wrongfully trading'. Make any threats you need to go get paid, and forget any future work.

Are there any assets you can hold to ransom? Legally that's a little dubiuous, but having some leverage is better than none at all. I speak as someone who's been reamed by people in a similar situation.

Locogooner

paddyrg wrote: »

Maybe point out that trading whilst insolvent is likely to make the director liable URL and they may be 'wrongfully trading'. Make any threats you need to go get paid, and forget any future work.

Are there any assets you can hold to ransom? Legally that's a little dubiuous, but having some leverage is better than none at all. I speak as someone who's been reamed by people in a similar situation.

I've done so informally. Not in an official letter as of yet.

The director said I'm slandering the company by making false claims.

Then he started threatening me and sending abuse.

It is obvious that they are insolvent.

By government definition, they are insolvent as they are not able to pay off debts on time or in full. They are severely in debt.

The only assets they have, are clothes.

The other reason why this is such a difficult decision for me is that it it's quite clear that there isn't much money left at all. There's around 8 other people that need to get paid.

I would essentially be nuking the company.

I have no idea where they would get the money from as well as investors are no longer interested.