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Keep on chasing payments

 
#1 Keep on chasing payments
29/04/2008 11:32

Small businessman

Quick question :- What can small businesses do to get money that is owed to them?

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#2 RE: Keep on chasing payments
29/04/2008 11:55

Russian to Small businessman (#1)

Employ a couple of large eastern european men to pay your client a visit?

Other than that, too simple a question - depends on the business you are in and what your relationship is like with the client amongst other factors.

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#3 RE: Keep on chasing payments
29/04/2008 11:58

------ to Russian (#2)

name & shame

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#4 RE: Keep on chasing payments
29/04/2008 13:16

Small businessman to ------ (#3)

I am not a consultant (merely an interested party) and this question relates to my brother who is a Joiner. He put some windows in for a new customer about 8 months ago and is still waiting for payment (of £6k). Considering he makes a profit of about 20k a year, this is quite a considerable worry for him. The customer always apologises when contacted and promises to put the cheque in the post the next day. He’s a professor at a university so I would have thought he would be a reasonable man [although now I’m typing this I can’t think why this is a logical assumption].

I was thinking of suggesting that my brother contacts the uni, but as it was a private contract and nothing to do with the university this could be totally out of order. But then again, so is refusing to pay for 8 months.

Any suggestions??

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#5 RE: Keep on chasing payments
29/04/2008 13:22

obvious to Small businessman (#4)

See a solicitor, then go to court

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#6 RE: Keep on chasing payments
29/04/2008 18:08

Expat to obvious (#5)

It's perfectly possible that your brother's client is genuinely an absent-minded professor who keeps forgetting to put the cheque in the post, but even if that is the case it's no justification for failure to pay.

Given that it's a relatively large sum and that it's eight months overdue, your brother is perfectly justified to get tough about this - it's gone beyond being reasonable.

Step one: write to the client informing him that if the debt is not payed within 14 days of the date of the letter your brother will file a claim against him. Send the letter by recorded delivery.

Step two: if payment has not been made after 14 days, go ahead and file a claim in the county court. This will cost £250, which must be paid up front but will be recoverable.

Step three: if the court finds against your brother's client it will order him to pay your brother the sum outstanding plus the £250 court fee. If he still fails to pay after a certain amount of time then your brother can ask the court to appoint bailiffs to collect the debt (this will cost an additional £50 but again will be recoverable).

Frankly I doubt it will get that far. Unless the client feels he has some genuine reason for not paying your brother, the initial letter threatening legal action will probably galvanise him into action.

Incidentally, one thing your brother might want to consider is interest. Was there any provision in your brother's contract with this client for interest on late payments? Even if there wasn't, your brother might feel that it's reasonable to claim interest. However that might cause further delays if the client objects so may not be in your brother's best interests.

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#7 RE: Keep on chasing payments
29/04/2008 18:10

Expat to Expat (#6)

Incidentally, I'd say that for the above process it's not really necessary to employ a solicitor - filing a claim at the County Court is a fairly simple process.

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#8 RE: Keep on chasing payments
29/04/2008 19:36

innit to Small businessman (#1)

http://www.hmcourts-service.gov.uk/infoabout/claims/index.htm

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#9 RE: Keep on chasing payments
30/04/2008 09:02

small businessman to innit (#8)

Cheers Expat,

After an extra couple of days thought, that is the process I was thinking of following. Send a solicitor’s letter saying pay now or pay in court +interest + fees. And hope that he really does pay as I’d imagine court can be a bit of a faf.

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#10 RE: Keep on chasing payments
30/04/2008 09:23

anon to small businessman (#9)

Is there a reason he's not paying?

Not being funny, but did your brother muck up the job in any way?

It's possible that, upon receiving a 'formal' letter, you may suddenly receive a fierce defence letter in return, complaining about shoddy workmanship, late delivery, you name it. Just be prepared for that.

However if your case is rock solid then I wouldn't even muck around with solicitor's letters at this stage. Write him a letter giving 7 days for payment. Tell him that after 7 days you will stick it through the court system (this is easy to do online). If/when you've done this, let him know and say you'll withdraw the application if you receive payment + costs before the summons date.

Disclaimer: This is not legal advice by the way.

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#11 RE: Keep on chasing payments
30/04/2008 09:25

anon to anon (#10)

Oooh yeah, forgot to mention - keep a copy of all the letters you have sent, record time/dates of phone calls and the promises of payment he has given you. Courts love that kind of thing.

This is not legal advice.

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