Corporate Debt Collection

davidturpie

Hi all,

Hoping someone might be able to shed some light on what can be a fairly worrying subject.

Bit of background, I am a 50-50 director of a limited company. 8 months ago our business completed a video which was part of a 2 video deal with a company.

They agreed to pay 50% deposit and then the 50% upon completion of each video. We gave them a discounted rate as they agreed to create 2 videos.

So, video 1 gets completed and they pay us, however they pay us twice. We don't even notice and neither to they for a while. Then an email comes in asking for the money back. (it has been spent)

I ask if we can just take the double payment as deposit for the next video. The answer is no.
Spin on a few months and we still haven't paid it back, each time some money comes in that we could pay it back with it ends up being spent on some other unforeseen business expense. There have been a couple of emails asking for payment and me saying we will pay it as soon as we can.

Also, the guy we were dealing with regarding the videos has since left.

Come Friday morning I get an email from Oriel saying they want the money back. Queue an email conversation where I offer to pay the £1,080 over 10 months with 10 x payments of £108. This isn't accepted apparently the client will only stretch to 3 monthly payments.

I have also emailed the company accountant asking if I can set up payment plan direct with the company. - they are yet to reply.

The worrying this is the language that Oriel have used, some examples are below:



1 - if continued non-payment our client will have no option but to proceed with a claim for judgement on the full amount plus costs.

The reason for this process is because you have no defence to issue to the courts so judgement would be obtained and you have 28days to settle the judgement.


2 - I have advised our client to instruct our solicitors to issue the claim for judgement immediately

As you have offered to pay in instalments before and never actually paid it is in our clients best interest to have the judgement in place so you can either settle directly to the courts in full within 28days to settle the judgement or indeed respond to the courts with an offer of payment this way our client has the satisfaction of payments not declining

3 - I have advised our client the only guarantee way to make sure the debt Is paid is through a claim for judgement due to 8 months of promises to pay and continued defaults on the promises

4 - The Pre-Legal trace process was completed earlier today and I sent this to (the company) as well so they have the back-up financial information on the business as well as seeing if the company has previous County Court Judgements.

If anyone can explain, or even my options (I know I have to pay them, I just don't have the money in a lump sum, or even 3 payments)

Many thanks

David

angryparcel

Yes they send you 2 payments which if you do your accounts, should of picked up on, they want their money back and you cant find it.

regardless if you offer to pay in instalments they have the legal right to refuse and set their own terms.

you would be wise to find the money to pay them as if they get a CCJ and you fail to pay they could pass to the high court and have enforcement officers turn up and removed goods to cover payment and the £1,080 will soon end up as £2,080 by the time fees are added

paddyrg

You owe the money. You've owed money for a while. You've not made an effort to pay even partial payments already. Of course they're getting very jumpy.

I suggest you find some money before you get taken to court, as costs will only mount from here.

There are other potential problems coming down the line, BTW - you'll have your year end coming up and that's always a big expense even if you've no CT owing you still need to pay your accountant. Just a heads up.

Lafuma

davidturpie wrote: »

Hi all,

Hoping someone might be able to shed some light on what can be a fairly worrying subject.

Bit of background, I am a 50-50 director of a limited company. 8 months ago our business completed a video which was part of a 2 video deal with a company.

They agreed to pay 50% deposit and then the 50% upon completion of each video. We gave them a discounted rate as they agreed to create 2 videos.

So, video 1 gets completed and they pay us, however they pay us twice. We don't even notice and neither to they for a while. Then an email comes in asking for the money back. (it has been spent)

I ask if we can just take the double payment as deposit for the next video. The answer is no.
Spin on a few months and we still haven't paid it back, each time some money comes in that we could pay it back with it ends up being spent on some other unforeseen business expense. There have been a couple of emails asking for payment and me saying we will pay it as soon as we can.

Also, the guy we were dealing with regarding the videos has since left.

Come Friday morning I get an email from Oriel saying they want the money back. Queue an email conversation where I offer to pay the £1,080 over 10 months with 10 x payments of £108. This isn't accepted apparently the client will only stretch to 3 monthly payments.

I have also emailed the company accountant asking if I can set up payment plan direct with the company. - they are yet to reply.

The worrying this is the language that Oriel have used, some examples are below:



1 - if continued non-payment our client will have no option but to proceed with a claim for judgement on the full amount plus costs.

The reason for this process is because you have no defence to issue to the courts so judgement would be obtained and you have 28days to settle the judgement.


2 - I have advised our client to instruct our solicitors to issue the claim for judgement immediately

As you have offered to pay in instalments before and never actually paid it is in our clients best interest to have the judgement in place so you can either settle directly to the courts in full within 28days to settle the judgement or indeed respond to the courts with an offer of payment this way our client has the satisfaction of payments not declining

3 - I have advised our client the only guarantee way to make sure the debt Is paid is through a claim for judgement due to 8 months of promises to pay and continued defaults on the promises

4 - The Pre-Legal trace process was completed earlier today and I sent this to (the company) as well so they have the back-up financial information on the business as well as seeing if the company has previous County Court Judgements.

If anyone can explain, or even my options (I know I have to pay them, I just don't have the money in a lump sum, or even 3 payments)

Many thanks

David

Options:
1. Pay up (borrow the money if necessary)
2. Worry about a CCJ against your company, which you seem to accept would be inevitable. Note, you will also have costs addded to the amount owed, so probably best to borrow and pay up now without the aggro, the costs will probably cost more than any interest you may have to pay on the money borrowed.

If you still fail to pay, and enforcement action becomes necessary, they you will have even more costs added to the amount you owe.

Lafuma

DavidP24 wrote: »

OK here would be my approach

Issue an invoice for the amount.

You write to the company something along these lines

"Dear Mr Customer

I am writing regarding our agreement for your company to purchase two videos at a discounted rate which was conditional on both videos being paid for within 12 months.

As you have breached our agreement the conditional discount of 50% is rescinded and I therefore enclose an invoice for £1080.00, this being the discount we gave you for ordering two videos.

As you are in credit with outrcompany for £1080.00 please consider this invoice as settled, you will be aware that we held the payment as lien whilst we awaited the order for the 2nd video.

This concludes our business for this order, however, if you have any further video production requirements we would be pleased to be of service.

Whilst writing, I need to ask you to inform oriel collections that we do not owe you any money, if you wish to bring this matter before a Court then it will be defended vigorously and we will be seeking our legal costs.

Yours sincerely

David"


So now it is a dispute, you have a claim against them, they have a claim against you. If you want you can wait for them to bring it to Court and then defend the claim and issuing counter claim on their breach of contract.

You push back hard like this, they will have to come back to settle or else risk a Judge doing the same thing and not awarding them their costs. You have been more than reasonable but they are in breach of contract.

Send the letter with invoice by registered mail with a copy to them by email with cc to yourself and receipt request.

Then just wait, if the debt collector calls again, say there is a dispute and we have nothing to say to you.

They can't actually do anything without a County Court Judgement.

Of course if emails you have sent suggest the discount was less or that there was no contract for 2 videos then you are best to settle but based on what you have said so far I wouldn't.

Where are either of these 2 terms on which you now hope the OP to rely upon included in the information as supplied by the OP? :huh:

:cool:

Kayalana99

£1,000 in the scheme of things isn't a massive amount of money to loan or borrow from someone (appreciate it can be a lot to some people overall)

Find a way to pay this money back ASAP. 10 months is not acceptable. Are you really going to let this go to court? You'll end up paying back double.

I have to say, this is an appauling way to treat a paying client. You have potentially lost thousands of pounds in business over future business and of course they are going to take you to court if you don't pay them....take a 0% interest credit card out if you have to....it will be cheaper then the alternative.

lincroft1710

DavidP24 wrote: »

Here

https://forums.moneysavingexpert.com/discussion/comment/72591784#Comment_72591784

Nowhere does it state there was a 50% discount just "a discounted rate"

davidturpie

Thanks for all your replies.

Intersting opinions from all sides.

The outcome is that the collections company/the original company we owe have settled for 10 x payments of £108.

many thanks
david