Agencies that go bust and fail to pay you

[masonryan]

I would have used any legal insurance you have to get a solicitor to write to the agency demanding the money otherwise they would start insolvency proceedings, not sure that's the correct term. In that way, you may get some money from them before others knock on their doors when it's too late.

Is there an explanation why this agency has gone bust? It would be interesting to check if the directors have paid themselves nicely out of the company recently... it wouldn't be the first time.

[SueEllen]

I would have used any legal insurance you have to get a solicitor to write to the agency demanding the money otherwise they would start insolvency proceedings, not sure that's the correct term.

That wouldn't have helped - court cases take months to sort out.

The only thing that would have helped is to walk out once a payment is late explaining to the client why you have walked off-site.

If you are giving a company a lot of credit i.e. 30 day payment terms on monthly invoicing then you need to be prepared to walk out immediately a payment is a couple of days over due.

[Safe Collections]

I would have used any legal insurance you have to get a solicitor to write to the agency demanding the money otherwise they would start insolvency proceedings, not sure that's the correct term. In that way, you may get some money from them before others knock on their doors when it's too late.

As SueEllen states that probably wouldn't have helped. The options would be normal county court claim that takes anywhere between 3-6 months to get to court currently, or spending around £2k to wind the company up (essentially you petition the court to force the company into insolvency).

The problem with the latter is your average agent has nothing of any real value in the business so you could easily just increase your losses.

Is there an explanation why this agency has gone bust? It would be interesting to check if the directors have paid themselves nicely out of the company recently... it wouldn't be the first time.

That will be explained at the creditors meeting, but it will likely be a case of the company being unable to continue financially and nothing further. The fact is the directors could have been plundering thousands of pounds a week from the company coffers but as long as HMRC have been paid they are unlikely to ever be banned as a director.

Even if they get banned, you just start up again with your wife as director and off you go...

The current limited liability system in this country is far to open to abuse in our opinion.

[SarahL2012]

See if client will pay?

I am sure I'm not alone in being in the situation where I suddenly stopped receiving regular payments of my invoices and after repeated chasing was fobbed-off with a massive sob story of how the agency had enormous cash flow problems but they were being re-financed and I would get paid within a month. Having chased repeatedly via email and phone calls when the time was up I then discovered the agency had done an overnight bunk leaving creditors everywhere. I am now due to go to a creditors hearing next week, probably to be told I will not get anything of the £14,000 they owe me. I am now facing bankruptcy of my own company.I was considering a charge against the sole company director for fraud but my legal advice says it is unlikely to succeed. Anyone been in the same situation and managed to get a result? Please help!!

Might be a long shot, but worth asking the client whether they paid the agency. If they didn't they might be willing to pay you directly.

[DirtyDog]

Might be a long shot, but worth asking the client whether they paid the agency. If they didn't they might be willing to pay you directly.

Be very careful of this. If the client has a legal obligation to pay the agency, then that's what they need to do - they can't breach the contract with the agency just because you ask them not to pay what is due.