Small Claims Court

[Mr T]

Hi

Today I had a debtor go into liquidation owing me £1200. I assume I can kiss good bye to it now!

I am now wondering if there was anything I could have done to get the money earlier. I obtained a warrant frtom the small claims court and one of their bailiffs visited the debtor (a gallery that had sold some of my stuff), who agrreed to pay £250 per month. He paid the first £250 then another £200 then went bankrupt.

What seemed strange to me was that the installment arrangement was made between the bailiff and debtor with no reference to me.

This is the first time I have had a bad payer in 20 yrs business, so I am a novice in this. Does anyone know if I could have done anything different and is this the normal procedure for the small claims court? It seems rather ineffectual.

Chris

 

[BradNaylor]

Sorry to haer about this Chris, its a real bummer.

Yes, you can kiss the money goodbye if the company has gone into liquidation. The chances of there being anything left after preferential creditors and the insolvency practinioner have been paid are normally nil.

I doubt that there was anything more you could have done within the framework of the law. It doesn't matter how many court orders or payment agreements you have; if a debtor goes bust on you that's that.

Best to put it down to experience and don't let the situation happen again. If a gallery had sold work of mine (an unlikely thing :lol and wouldn't pay me what I was owed I would just go round and take some goods in lieu.

Being 6'2" and 16 stone helps in situation like this, though!

Cheers
Dan

 

[Mark Hancock]

Sorry to hear about your situation.

When you have a judgement against a debtor from the Court there are a number of options you have to recover the debt. Sending the bailiff in isn't always the best option. In the past I have used the 'Oral Examination' (I think that's the title?) first. With this the debtor has to attend the Court and you can question him about his finances, what assets his has etc. After this you can decide what course to take to recover the debt. Sorry I can't remember all the options but I'm sure someone will come up with them.

 

[Karl]

Chris

Sorry to hear of your debt.

Well, the first thing is that it's not all doom n gloom. The £1200 bad debt can be offset against your income, thereby reducing your tax liability.

With regard to what else you could have done; not a great deal in all honesty.

What agreement did you have with the museum regarding your pieces? Was there a formal contract, or did you simply supply your pieces with a price tag at which the museum could sell them? I can't remember the precise law pertaining to this matter, and am unsure whether you would have any redress against the purchaser?

Cheers

Karl

 

[Doctor]

My advice on bad debt is two fold:
Firstly it's very difficult to predict who will default on you, but be aware that it could be anyone regardless of how nice they are, just because you get a good feel about someone means nothing.
and secondly, never expose yourself to a debt that would take you under if it was defaulted on. Its a bad news to lose money but worse to lose your buiness through no fault of your own.

 

[joiner_sim]

Back in 2007 it took over 5 months for us to get £60,000 that was owed to us. Very nearly went under because we had no more money to keep the business going!

We're now currently owed just over £100,000 but I think we should be getting that...... :roll:

This trade's always going to be a bit of a gamble.

 

[Doctor]

This trade's always going to be a bit of a gamble.

Which trade are you talking about, joinery or furniture.

 

[joiner_sim]

joinery.

 

[Doctor]

Yes i can see that with the state of the building industry

 

[Mr T]

Hi JS

And I thought £1200 was a lot to be owed. I couldn't cope with the stress of being owed that much.

Chris

 

[kityuser]

during the 80`s recession the small timber/fencing yard that I have known all my life (and worked at for most of my teens and uni education) went "under" ...... temporarily
My parents were directors of the company, my mother being the company sec also.
She always comments about it when we hear stuff about the current recession.

Apparently at the time they had LOADS of work but sadly were contractors to local authorities..... AND THEY JUST WOULDN'T PAY! they ended up going under with a full order book, but too much money being owed to them by the local authorities.

A sad story but I'm sure there is a moral in here somewhere.....


Steve

 

[head clansman]

Hi

If he has gone into liquidation there has to be a company dealing with his administration to see if the company can be saved or wound up all together, get in touch with them prove he still owes you money and then stand in line behind all the other deptors who's owed money, who knows you may get 10 p in the pound if theres any money left from his company, sorry it not good news for you , but hey you never know you might just get paid in full, bummer , good luck.hc

 

[Mr T]

Hi Clansman

If I have a warrent against him would the administrator not get into contact with me anyway? If not, how do you find out who the administrator is? The debtor is not very communicative.

Chris

 

[head clansman]

Hi chris

the company who my wife worked for went into administration , and they had to as all companies in the same position post a legal notice in the shop window . It states who the adminisrtrator is his address and contact no of the company dealing with his depts plus a load of other things that i don t know about , or it should be somewhere on the front of his premises , if not look up his company name at company house on the web and that could lead you to him and the information required , good luck.

better still ask him straight out face to face , the administrators cannot ask you if they don't know about you and as i understand these things you are the debtor not him he owes you the dept i think . hc

 

[Karl]

Chris

Depends on whether it was an individual or a Limited company.

If it was an individual you can check the bankruptcy register for free - http://www.insolvency.gov.uk/eiir/

For Ltd co's, check the Registrar of Co's. Again, free.

Did the bailiff acting on your behalf provide you with any paperwork? Did he take "possession" of any goods from the debtor? Whilst he may not have removed any goods, he may have signed an agreement with the debtor that certain assets now belonged to him in lieu of the judgement debt until such time as the debt was paid - known as a walking possession agreement. If he did (and I suspect he may have done given that he reached a repayment schedule with the debtor) then those assets subject to the WPA are yours and do not constitute part of the debtors estate.

HTH

Cheers

Karl

 

[Karl]

and as i understand these things you are the debtor not him he owes you the dept i think . hc

HC - a debtor is somebody who owes money to another. Chris is a creditor (not a debtor) of the insolvent person/company.

Cheers

Karl

 

[Mr T]

Hi Karl

The bailiff was not very forthcoming about what arrangements he had made with he debtor, which suprised me. I think he said that he had taken walk in possession of his goods. But when I spoke to the county court they said that the bankruptcy took precedent over the possession.

The debtor is limited company.

Chris