Agencies that go bust and fail to pay you

[ianrmather]

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!!

[stek]

I'd walk after first missed payment, 14k is a lot to expose yourself to if not paid...

Also I only ever work via the big Agencies, bit late for you now but I would never expose myself to that level for smallagent.com...

Use the dunning process, if things are as bad as they sound seems futile, gut feeling is you'll have to write this one off.....

[v8gaz]

I'm guessing you don't have PCG Plus membership, with Agency default insurance. If not, you can basically wave the cash goodbye. Sorry.

[craig1]

First thing, get hunting for roles again. Your own cash flow is your highest priority.

At the creditor's meeting, make sure that you formally tell the meeting that you have clear evidence of the company knowingly trading while insolvent. (You did get the agency's sob stories in writing, didn't you?)

Also make it clear that you're not going to go away in pushing for that to be acknowledged. There's a good chance you'll get nowhere with this but there's also the chance of being vindictive and getting the directors' assets dragged personally into any money reclaim.

Next time, be firmer in negotiating good payment terms and enforcing them. I've had every contract bar one for many years now on weekly bill with one week payment terms. If you're late a payment then chase from the very first day it's late.

Also, don't rely on the size of the agency being a safeguard. I know some very big agencies that are operating in a seriously dodgy cash flow cycle. For example, one I worked at in 2011 was on 4% fixed margin, paid me weekly with one week terms yet had 45 days from end-of-month terms with the client. I still cannot work out how they made any money from me at all, especially as the amount of admin I caused them through being on the phone every Friday saying "I've not received my payment remittance for this week, have you paid me? Pay me!" I'd imagine that all it would take is a few end clients to miss a payment for the agency to be in serious trouble.

[tarbera]

Claim on your PCG + insurance

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!!

sit back and smoke a cigar

[northernladuk]

Don't want to sound rude of the back of a very unfortunately event but why is your company facing bankruptcy over this amount? Where is your warchest?

[DirtyDog]

sit back and smoke a cigar

PCG+ only covers you for £7500 of agency default (and nothing towards expenses).

If the OP is out £14k, then it's better than nothing, but I wouldn't be lighting up a cigar if I'd just lost £6k.

[tarbera]

he is probably forgetting he can get his VAT back

PCG+ only covers you for £7500 of agency default (and nothing towards expenses).

If the OP is out £14k, then it's better than nothing, but I wouldn't be lighting up a cigar if I'd just lost £6k.

hence another £3K from the bill.

All he has lost now is a good night out

[Boo]

I'm guessing you don't have PCG Plus membership, with Agency default insurance. If not, you can basically wave the cash goodbye. Sorry.

Remind us all what the maximum compensation under that scheme is, v8gaz. Just for laughs.

Boo

[GillsMan]

I'd walk after first missed payment, 14k is a lot to expose yourself to if not paid...

Also I only ever work via the big Agencies, bit late for you now but I would never expose myself to that level for smallagent.com...

Use the dunning process, if things are as bad as they sound seems futile, gut feeling is you'll have to write this one off.....

With my larger clients, I bill monthly, and in exceptional months, those amounts can reach near £20K. Not boasting, but if I walked after the first missed payment, I'd still be down a similar amount.

That said, when I'm billing those amounts, it's always through a larger agency. If it's a smaller agency, I credit check them first - I should do it with the larger ones too, to be fair.

It'd be pretty crushing to lose this sort of money. It wouldn't push my company over the edge but it would be a gutting amount to lose. Horrible horrible situation, and I feel for the OP.