collecting three yrs old debt

[ross]

Just to cut the story short, my GF was a contractor (Umbrella -> Agent -> client) three years back, in a five months gig she did't receive payment (£9500) for last two months),looks like client paid agent but agent did't pay umbrella and disappeared (i.e. not answering calls or email),meanwhile umbrella told they will sell their client debt to us and sent us a document.

With that document my gf appealed in employment tribunal and got the judgement favour of her. (Agent did’t turn up). We sent copy of judgement to his address and nothing happened after that. Still agent is active and running business. I like to

1) Collect the debt - is it still possible after 3 yrs? had a chat with few debt collectors, is that an only way or high court enforcement?

2) Make a formal complaint and stop him running business?

Any help is much appreciated.

[northernladuk]

I very much doubt number 2 will come off over an unpaid debt.

Did you send it registered post? Maybe get a courier to hand deliver it and get a signature. He will claim he never got it if you didn't.

Do you know his company history as well? Is he trading under a new company or is the same one running. His trading name might be the same but what about the company. Remember his company owed you money not him so expect he has tried covering his tracks to divorce himself personally from the debt.

[tractor]

...

If the company now trading is the one that owes the money (and you have to be sure of this) look up some info on Garnishee Orders.

"Garnishment is a drastic measure for collecting a debt. A court order of garnishment allows a creditor to take the property of a debtor when the debtor does not possess the property. A garnishment action is taken against the debtor as defendant and the property holder as garnishee. Garnishment is regulated by statutes, and is usually reserved for the creditor who has obtained a judgment, or court order, against the debtor."

This means that with a judgement, you can ask to court to authorise you dipping into the debtors bank account or other property to satisfy the debt. It is a minefield so be careful and take proper advice.

The best thing about this is that if an order is granted by the court and served on the garnishee (pref their bank), the garnishee is not allowed to discuss it or otherwise notify the debtor but must satisfy the order immediately.

[Safe Collections]

Just to cut the story short, my GF was a contractor (Umbrella -> Agent -> client) three years back, in a five months gig she did't receive payment (£9500) for last two months),looks like client paid agent but agent did't pay umbrella and disappeared (i.e. not answering calls or email),meanwhile umbrella told they will sell their client debt to us and sent us a document.

Ouch. Really we would have thought that it's the umbrellas responsibility to chase the debt and pay your GF. That said it isn't the first time we have heard of agencies or umbrellas trying to pass the buck financially...

With that document my gf appealed in employment tribunal and got the judgement favour of her. (Agent did’t turn up). We sent copy of judgement to his address and nothing happened after that. Still agent is active and running business.

It isn't unusual to find a debtor will simply ignore a CCJ and carry on trading. But on the plus side having a judgment does increase your recovery options. But are you 100% sure that the company is still the same?

1) Collect the debt - is it still possible after 3 yrs? had a chat with few debt collectors, is that an only way or high court enforcement?

The good news is you are still well within the statute for collection and yes your options are use a debt collector or go straight to high court enforcement.

Both options have pros and cons.

A good collection agency will be able to use the CCJ to put pressure on the debtor to pay the outstanding balance, as they will know the various enforcement options, such as having the debtor orally examined by the court.

Plus a competent agency will not ask for any money up front, or ask you to sign a contract or join a club. meaning you will only pay a percentage on the recovered amount. If they do want money in advance ask yourself this, if the agency is that confident they can recover the debt why do they want you to pay in advance?

Also be especially wary of any agency that claims they can make a director personally liable or that they can have the director banned. Whilst both are theoretically possible in practice it is extremely rare.

High Court Enforcement is another matter. You will be expected to pay a small fee in advance normally around the £150 mark (note if you get a quote any higher than this run for the hills as you are being ripped off).

Additionally the High Court Enforcement Officer (HCEO) will generally be looking to seize goods or assets that are worth approximately 3 X the judgment amount. So in this case in the region of £30K. However in our experience the chance of an agency having more than £2k worth of saleable assets is slim to none.

Bottom line, If the agency has no assets to levy on the HCEO is essentially powerless.

More info on enforcing CCJ's can be found on the directgov site and the businesslink site and of course our site.

As for your final question

2) Make a formal complaint and stop him running business?

Again this is theoretically possible, but highly unlikely. You can read more on The Insolvency Service site.

Good luck

[ross]

Thanks for your reply.

He is still trading under same name.After i got hold of him on phone and he said " do i owe you money? thats news to me , leave it with me , i will talk to my accounts team and come back to you in two days" .I sent all documents again in email nothing happend.obviosuly he wont pay me.

he is just a one man recruitment company and i checked his details in company house ,he never closed that company and filed tax returns properly.above all he just got 90 pounds in bank!

[Safe Collections]

If the company now trading is the one that owes the money (and you have to be sure of this) look up some info on Garnishee Orders.

It is a minefield so be careful and take proper advice.

Great idea, but probably not for the uninitiated for the reasons outlined above...

Plus they are expensive and you really need firm evidence that the company has money in the bank. No money in the bank and the fees for the order are wasted as you have to re-apply every time.

[northernladuk]

Thanks for your reply.

He is still trading under same name.After i got hold of him on phone and he said " do i owe you money? thats news to me , leave it with me , i will talk to my accounts team and come back to you in two days" .I sent all documents again in email nothing happend.obviosuly he wont pay me.

he is just a one man recruitment company and i checked his details in company house ,he never closed that company and filed tax returns properly.above all he just got 90 pounds in bank!

First step is to prove he has got the papers. Use Royal Mail signed for, maybe pay solictor or whatever group hands it in person. If you just rely on post he can say he never got them.

Read up on Dunning. Highly unlikely to work in itself but will certainly capture his attention once you have shown you won't back down.

[Safe Collections]

First step is to prove he has got the papers. Use Royal Mail signed for, maybe pay solictor or whatever group hands it in person. If you just rely on post he can say he never got them.

That isn't technically true as he has been notified, repeatedly. The court sent him the claim form, then the court would have sent him the judgment in default notice and the OP subsequently sent him a further copy.

Sending it again is likely to be a waste of time and postage in our humble opinion.

Oh and Ross, don't forget you are entitled to three years worth of interest on the judgment!

[tractor]

...

Thanks for your reply.

He is still trading under same name.After i got hold of him on phone and he said " do i owe you money? thats news to me , leave it with me , i will talk to my accounts team and come back to you in two days" .I sent all documents again in email nothing happend.obviosuly he wont pay me.

he is just a one man recruitment company and i checked his details in company house ,he never closed that company and filed tax returns properly.above all he just got 90 pounds in bank!

Don't be misled by end of year accts. That may well have been the sum left after he took your 9500 as dividends!! It will no doubt be a different story now.

[Old Greg]

Don't be misled by end of year accts. That may well have been the sum left after he took your 9500 as dividends!! It will no doubt be a different story now.

But if that is the case, is that not an illegal dividend, as dividends are taken from profits? Will reporting him to HMRC on this basis help?