Charging Interest on Overdue Invoices

[psychocandy]

Thanks for your help, advice and support, the client is now saying that they "should be in a position to pay the balance by mid April", so I think I'm going to send them the statement of interest and also offer to waive the interest if they pay within 7 days.

If I send them an invoice showing the interest due up to today (11th March), when should I update the amount and how should this be done? For example, should I invoice them for 31 days more interest on 11th April?

My big concern is that they're going to wind-up the business and I won't receive anything. Does this sound likely for an 18-month old start-up employing around 10 people, or am I being paranoid?

Hang on its already 6 months and they're trying to say they should be able to pay you in a months time?

I'd get in there quick before they fold. Get legal claim in asap.

[psychocandy]

Well, thanks again Northernladuk. I've just issued them with a notice of interest due. However, I'm not going to wait and I now just want the fastest way of retrieving the original balance.

They've said that they do intend to pay "as soon as [they] are able", but they seem to be relying on current investment negotiations/April VAT return to pay me. I am indeed worried that they'll go under before I get paid.

What are the pros/cons between small claims and a debt-collection service? Which is likely to be faster? My instinct is to go through the small-claims court but there seems to be a cutoff at £5000, after which the process changes. They owe me just slightly more than that based on a number of different invoices.

Is there any point in limiting my claim to £5000 in an effort to push it through faster?

Whats this 'pay as soon as they able' bollacks? Sod that they owe you. No excuses. Seriously, matey, time to kick off now and stop being nice.

Try walking into Tesco, picking up some cornflakes and telling them you'll pay them as soon as you're able.

[psychocandy]

I don't think there was anything gormless about my question. Today is the first day I've actually got them to admit there might be something wrong with their finances and I'm following things up through Citizens Advice as well, to try and find a pro-bono lawyer.

Does anyone else have any advice?

And you didnt think it might be a problem when they hadn't paid after 5 months?

[yusefkerr]

Enough making me feel like an idiot, you've made the point by now. Does anyone have any actual advice on the following:

1. There is no dispute about the amount they owe to me, they're just avoiding paying. Is there any reason for me to go to a Small Claims Court?

2. Assuming the above answer is no,

- From what I've read online I have to give them 7 days notice that I intend to issue a Statutory Demand or employ a Debt Collection Service, which I've now done.
- After this time, I can issue a Statutory Demand myself and there's a template for this here: https://www.gov.uk/statutory-demands...atutory-demand
- If that still doesn't get a response (they have 21 days to pay), I would pay £450 for a solicitor to issue a Winding Up Petition

How would employing a Debt-Collection service speed this up, or improve my chances, and is there any benefit in going to a solicitor earlier?

[northernladuk]

4 days later and you still haven't engaged a professional??? I think you are gonna have to kiss this payday goodbye.

[d000hg]

My big concern is that they're going to wind-up the business and I won't receive anything. Does this sound likely for an 18-month old start-up employing around 10 people, or am I being paranoid?

Holy crap! I would be more than paranoid in that situation. I think I would be bricking it. I hope it isn't a lot. I don't think there is any hard figures about startups failing but a quick search shows a few people putting it at around the 80% mark don't make it to the end of year 2.

While NL is right here, I thought the question was if the business would be likely to wind up simply to avoid debts rather than if it was about to go under.

[yusefkerr]

NorthernLad, as I've explained, I don't see what a lawyer or debt-collector could do for me that I can't do for myself at the moment. Does anyone have specific advice on the 2 questions I've asked above?

To be clear, I'm concerned that their business is not yet making money and that they will only be able to pay me if current investment rounds are successful.

[northernladuk]

NorthernLad, as I've explained, I don't see what a lawyer or debt-collector could do for me that I can't do for myself at the moment. Does anyone have specific advice on the 2 questions I've asked above?

Yeah, a debt-collector and/or lawyer.

They wouldn't have left it 6 months before taking action...
They would know the answer to your question about small claims court...
They would know what steps to take in your position....

That is three reasons they are a better bet than you pounding a free forum....

[Wanderer]

They've said that they do intend to pay "as soon as [they] are able", but they seem to be relying on current investment negotiations/April VAT return to pay me.

Piffle. Go in and go hard on them, you've extended them quite enough credit and now it's time for them to pay up. You can be sure that there are plenty of hard nosed business people out there who have done the same thing to them and have been paid so don't be a soft touch.

At very least get them to agree a payment plan so they can pay in stages.

[psychocandy]

Enough making me feel like an idiot, you've made the point by now. Does anyone have any actual advice on the following:

1. There is no dispute about the amount they owe to me, they're just avoiding paying. Is there any reason for me to go to a Small Claims Court?

2. Assuming the above answer is no,

- From what I've read online I have to give them 7 days notice that I intend to issue a Statutory Demand or employ a Debt Collection Service, which I've now done.
- After this time, I can issue a Statutory Demand myself and there's a template for this here: https://www.gov.uk/statutory-demands...atutory-demand
- If that still doesn't get a response (they have 21 days to pay), I would pay £450 for a solicitor to issue a Winding Up Petition

How would employing a Debt-Collection service speed this up, or improve my chances, and is there any benefit in going to a solicitor earlier?

I don't understand (1). The might not dispute it - doesn't matter - but they still have not paid. How long are you going to allow them to blag it by being nice and stringing you along?

I would be getting a professional collections agency involved by now.