Client behind on payment and looks like they are about to go bump...

[Scratch It]

An insolvency comes in many forms. Dont confuse a creditors voluntary arrangement and administration. They are completely separate legal arrangements. CVAs are primarly used so that a business can continue trading under the same ltd company. An administration is primarily used as a tool where the director of the old company closes company A at 11:00 and starat company B at 11:01. The assets are purchased by newco and old cos liabilities die with it (unless the debt is against the director, not the limited company)

Few companies go down the CVA route, and many many do fail, and are eventually issued with a winding up petition. A cumpulsary winding up order is a seperate legal entity again where the company is closed at the order of the court. The last of insolvency is a company voluntary liquidation where any assets in the companies name are liquidated and cash generated used to pay the insolvency practices fees and creditors (yes, in that order).

It largely depends on his asset value as to what route will work best for you - though do bear in mind that his Insolvency Practitioner will likely be working out the best solution for the director (and could be receiving excellent advice on how to ensure you dont get paid). That being said, if the company is asset rich and hasnt transferred the assets to his,his wives,his dogs name outside of the last free years, you may be fine. If it isnt, then a CVA is the only really feasible way for you to see a return. Is the company asset rich? It doesnt sound like he has your best interest at heart. what exactly did you sign?

You can take action, you can issue a CCJ against the company, and even potentially place a winding up petition against the company. CCJs are an excellent tool - they are in the public domain, and for that reason are avoided like the plague to avoid embarrassment and will have a large bearing on his credit worthiness severely limiting his options should he wish to refinance the company etc.

Im not sure if your able to pm on here, though

[Scratch It]

I didnt finish my sentence!, if allowed feel free to pm, can do a little digging.

[Andy Hallett]

Reading through there are a lot of unknowns.

FWIW, You must establish the current status of the company, this is a matter of fact.

If not in administration follow the normal colection of debt procedure and assuming there is not dispute issue a Stat Demand followed by a Winder - You may find that another creditor has already done this

If in administration Register your proof of debt with the relevant IP

Either way it doesn't look good.

[Safe Collections]

The thing is though that it looks like the directors are continuing to seek ways out of their situation, you don't look for CVAs unless you have some hope of turning your business around. The OP has two choices, wait with the rest of the creditors for an unforeseen amount of time until they finally go bang, and they will if HMRC refuse to play ball with the CVA, or try to get ahead of the queue by suing, aiming for summary judgement and getting the bailiffs in to get goods before the company finally falls over. Might sound sharp but I'd be going for any avenue possible to get my money, £25,000 in the hole means the costs of a DIY lawsuit are trivial in comparison.

Whilst we would agree with you in principle, we don't buy the CVA line at all. First ClientCo asks if the OP will agree. Next thing we hear is the CVA was turned down by HMRC.

We would like to know if the OP ever received a formal notice in relation to the CVA, we suspect they did not and given the time frame we would wager the CVA was never a serious option, merely an excuse to further stall creditors. Its an excuse we hear about once a week, nine out of ten times its a complete fantasy.

As for court action well it is an option of course, but it is going to cost the OP money. Money they are unlikely to ever recover if the company is insolvent.

True they might get summary judgment, but it is much more likely they will enter the system and be waiting anything from 1-6 months to actually get judgment, depending on if the debtor dodges service or defends the action and the backlog at the court.

As for enforcing any judgment, yes you could pay for the sheriff to go in but does the debtor have physical assets worth £50K as that is what they will be looking for. If its a service business then the chances are they will not.

Some people have said to me in the past that I'm a bit aggressive in my accounts receivable but any credible client with a good AR team will be doing the same to their debtors who are slack in payment. If a company is struggling to pay its bills, it's far more likely to pay something to shut up an persistent creditor chasing their money than pay someone who's passively sitting back waiting for their money with the occasional polite chase.

Believe us when we say we completely agree with your view on your AR, but if the debtor company is actually insolvent there may well be very little the OP can do now to actually recover what is owed.

The problem is at the moment, nobody knows anything about the company in question so we are all in the dark. It makes it difficult to actually give any constructive advice. But this:

Two choices as I see it:
- Sit around doing nothing to formally chase the debt (as has happened for about a year) will result in getting nothing or maybe a few pennies from the corpse of a dead company.
- Be a bit proactive and you have a small chance of getting a far greater amount of the money back.

Is about the long and short of it. But with the caveat that throwing money at the recovery does not increase the chance of any recovery.

Edit to add: OP have you purchased a credit report on this company recently? That would certainly answer a few of your questions and you may well find the company has a growing list of CCJs already...