Some advice please - non paying customer

Luna69

Hi
I'll try to keep this as brief as possible as it is a long story. This is on behalf of my partner, but basically he did some work for a guy (young lad, fresh from uni, set up his own business, had a lot of advice from my partner etc), in the beginning he was paying, then the payments were reducing, but he still wanted the work. After owing us for a few months, my partner decided not to do the work, however this guy and his brother basically railroaded him into completing it for them for the date required, meaning he worked all one weekend and through the night with the promise that they would pay him all the money owed if he completed the job. (This is artwork we're talking about). He completed their job and still no money showed up.
This money has been owed now since April, a little has been paid inbetween, but the total to date last month was £2,345. My partner got fed up and started hassling him for the money to which he was sworn at down the phone by this guys father ( I was a previous friend of his mum's, although not so now as she was basicallly the same). In the end this guy told my partner he thought his charges were inflated! Even though he'd had 4+ lots of work done from the initial job, so he knew what his charges were. He was going to revise what he thought he should be paying! I don't think this is right but.....

Eventually we got a letter and his thoughts were the total should have been £1,300!!! I couldnt' believe this.
However after my partner spoke to a few people (not financial people) an ex boss for one, he said he should take it and get rid.
However this was now a few weeks ago and we've heard nothing else.

We know he's owed a lot of people other than us, he was turfed out of his expensive status symbol, centre of town office for not paying the extortionate rent (there was only him in a sharp suit with a lap top, basically). My partner has found out he's now paid up two of his other debtors, or began to, but only because at least one of them had sought legal action.
My partner doesn't really want to go down that route, but he's wondering if he has any other options or anyone can advise? Also we dont' know if this will cost us in the long run and basically we cant' afford to pay solicitors etc.

Any help appreciated.
Thanks
Yvonne

Savvy_Sue

Is it over the limit for the small claims court? that doesn't require solicitors and is meant to be reasonably straightforward.

the other thing is that if he has settled some bills with the threat of legal action, a letter asking for full settlement by X date, otherwise the matter will be placed in the hands of our solicitors, may do the trick.

Mike_by_the_Sea

You could try specialist debt recovery - I know a couple of people that come highly recommended - e-mail me if you would be interested in having a chat with them.

Edinburghlass_2

Its under the limit for small claims court that Savvy Sue suggests, you can do it online here....

http://www.hmcourts-service.gov.uk/cms/1051.htm

Lifeisbutadream

We had a non paying customer last year - £1400. He pleaded poverty - even though it was an insurance claim and he banked the money given to him by the insurance!

Out of principal, we took him to court. He offered to pay us £1 per month, we we obviously rejected - the judge did too, which enabled us to go for a charging order on his house - this means that basically he has to pay us if he dies, sells his house or re-mortgages.

The charges to us were approximately £240 - the charges were added on to the debt, but we went through a debt collection agency and will have to pay him a fee when we eventually get the money. We will also have to pay VAT on the amount, because we have since gone VAT registed. There will be hardly anything left for us, but TBH I dont care - I would rather give th ewhole lot to charity than him have it - HOW DARE THESE PEOPLE STEAL MONEY FROM HARD WORKING PEOPLE!

Personally if I would you I would chase for the full amount out of principle, but if he doesnt own a house, I dont know what would happen. There is always the possibility that he will declare himself bankrupt - in which case you will get nothing!

Good luck - let us know what happens.

Luna69

Hi all
Thanks so much for your replies. He is currently drafting up a letter to send this guy after he emailed him and had no response. He's looked into the small claims, will cost us £85 to do that.
We had thought about the fact that he lives with his parents and there was always the chance he'd go bankrupt before he paid us and now knowing how his parents have behaved over this, I get the impression they'll probably talk him into that rather than pay us.. or at least his dad would.
Another thing his dad said was that my partner owed his son £600 for a crap advert!
Basically he worked with what he was supplied with and he wasnt' happy with it himself as it's not his usual standard (he's a perfectionist!),but the guy was happy at the time and so it went away, it' s just unbelievable the way some people go on.
I'm really more surprised with his mum as we were friends for 5 years and she's basically closed me out and won't speak to me! We've done nothing wrong!

Never mind, not losing sleep over it, but we do want to send that guy down for what he's put us through.

I know we do have to change some of the ways we are working at the moment, it's been a rollercoaster 4 years in business.. partner was hospitalised with pneumonia on the day he was due to move into new premises, our son was hospitalised for a week, we've been in a similar situation before with a non payer, who at the moment thinks he's gotten away with it, but he hasn't and then last year some kids set fire to some junk outside and took out a few units, ours being hit the worst and my partner was still in at the time.. thankfully escaped unhurt, but took 6 months to rebuild our unit and we lost practically everything and discovered due to adding to the business over time, we were under insured!! So we have incrued a lot of debt rebuilding over the last year and a half (the fire was a week before our 3rd child was due!)
Why haven't we just given up yet?

We hope to start again in a fashion next year with a lot of revisions and terms/conditions in place, we can't go on as we are right now.

ANyway, thanks again for all your help.
Yvonne

Luna69

Just incase anyone else has any suggestions which way to go.. this guy since the letter/email was sent stating we'd accept £1,700 , w hich is still a big drop, if he paid either the whole amount or half this Monday and half by the end of the month, either in cash or by credit card, is still claiming he should only be paying £1,300 by his calculations! We've told him either pay what we've asked or we send in a debt collector or take him to small claims whereby we'll be claiming the full amount.
From what we can gather, this guy owes at least 4 other people that we know of slightly more than what owes us, each!! In a lot of trouble I think.

kaznelson

Don't forget Luna if the guy doesn't pay up and this was a B2B transaction you can charge interest on top of this debt.

If you need any advice PM me, I have been recovering B2B debts for many years and would gladly give you some advice

carroussel

Can anyone give me some advice please. We are a small business and sadly one of our main customers will not pay. they owe for November around £10,000. Our payment terms are strictly net 10 days. They have always been slow to pay but since they were taken over we are just being drip fed £1000 here and £500 there! This has had a devestating effect on our business and we have had to put 2 employees on short time just before Xmas. They say there are no queries with any of the invoices but say they are unable to pay. We agreed to let them pay a part payment providing we got the cheque by today. No cheque! I emailed them and they now say they dont know when the cheque will be signed. We have had no alternative but to threaten legal action. This is the first time anything like this has happened to us and I must confess we are sick with worry. Can anyone help please Thank you

Mike_by_the_Sea

Hi carroussel

Welcome to MSE.

As per my response to Yvonne above, you could try specialist debt recoverer - I know a couple of people that come highly recommended - e-mail me if you would be interested in having a chat with them.

This way you can have somebody dealing with the debt whilst you can focus on the business.

I assume that the customer is bigger than you and as such they should be more responsible than let a small business suffer just because they have cashflow issues. Perhaps it migt also be an idea to ask them to pay you via bacs and then you are not waiting for the "cheque in the post". Also, for a small fee you can then get the bank to do a fast clearance on the money.

Good luck

Mike

Donegal_Paul

Got stung last month with a guy refusing to pay his bill due to an unrelated fault with his scooter. (we're a small classic scooter business and it goes very very quiet this time of year, every penny helps)

Anyway, he owed £240 and with some toing and froing, I eventually accepted £160 and he won't darken my door again. In the end I couldnt afford to go down the small claims route, moneys that tight.

Now i have another customer that has had work done, but needed more.
3 weeks he's been saying he'll drop some money up but hasnt, hence we've done no more work and his scooters sat in the workshop in a sorry state.

Rang him last thursday to politely explain where we were up to, why we'd not touched the scooter for a couple of weeks and that he'd promised me money for the last 3 weeks.

Spelt out that this concerned me and he had one week exactly (ends today, Thursday) to pay for the work so far or I'd have to see where we go from there.

If people cant afford to have stuff done why dont they have the brains to be honest about it, i'd have worked something out with him.