Question
I had some business dealings with someone I know and they now owe me and my company £12,800.
I have tried and tried to collect this money, and have thought about taking them to court, but I am unsure what is the best course of action?
I need that money to keep my company going, and I have sent emails, letters demanding payment, and have tried phoning the owner of the company, but they never answer their phone. I am unsure now if they are even trading.
Can I make them bankrupt to get the money owed to me?
Marcus
Answer
Marcus,
You ask a good, and what may be a complicated question, you may wish to seek legal advice here.
In most instances, if someone owes you £5,000 or more, you can file the petition to make them bankrupt. You pay the bankruptcy fees of £680, and they are made bankrupt.
However, there can be many caveats to your particular situation:
- What agreement do you have in writing for what is owed to you, for a service or product provided?
- Who signed that agreement for the company who owes you money? Was it as a LTD company or did a person sign as a Director?
- Does the company or person who owes you money have any assets, such as property, or does the company have any assets?
- Is the company even still trading?
- Does the company or individual owe anyone else, do they have other outstanding debts?
There are more questions, but you get the idea of what I am asking.
Two issues arise, who signed for the other company on any contracts, and are there any assets that make bankruptcy worth while to pursue?
If you were to make the company or person bankrupt, not only do you pay the fees, but all their debts/accounts are included in the bankruptcy, and all creditors are treated within the bankruptcy. If they owe more money to someone else, the distribution of any assets follows in line.
Then there is the issue of, does the company or person have any assets? If they have nothing, you get nothing in bankruptcy.
There are other options, such as possibly looking to obtain a CCJ/County Court Judgment against the company or individual. Then you look at getting an Enforcement Order to collect the debt.
Again, if there are no assets or money to collect from the company or person, you cannot get anything.
Lastly, depending on how the debt is set-up, you may be able to sell it on to a collection agency to collect. You may only receive pennies on the Pound of what you are owed, but it is one way to offset the loss.
I hope this helps.
Regards,
Jon