Bad Debts

H

Hans

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I have a small company who like everyone else in this climate has taken a hit but I am still managing to keep my head above water.

My biggest gripe is the way other companies are using this recession to hold on to payments and now take so long to pay. I have one company that owe me payment for over a year and it is looking now like I wont get payment from them even though they are still in business I have to listen to a lot of sob stories from them as if it is my problem (I have enough of my own). I have gone down all the roads to get this from them but unless I take them to court things don't look good.

I don’t think as individuals we can do any thing about this but I think it's time that the government stepped in and there were laws about company payments or a body that can help businesses like me. I also think that there should be some way of checking up on companies that have a history of not paying their debts - as I now find out this company has - and probably are still purchasing and have no intention of paying, it might mean closing down the next company it does this to.

Is this situation affecting others or is it just me and the business I'm in as I have to give credit as I have a lot of other companies biting on my heels for the same business.
 
Hi Hans,

Unfortunately, it is not only you that is being affected by people not paying. You may even find that people are not paying you as they are not being paid themselves. It is a terrible circle!

I note your comment about "having to give credit" the problem with this is and you obviously appreciate it and that is if you dont get paid for your work you might as well not have had the "sale/custom". Obviously, I am not for a second suggesting that you start denying people credit but people really need to work hard on ensuing that customers have a good credit rating and that small amounts of credit are offered initially in order to build up a relationship.

Companies that are unable to pay their debts as they fall due are quite possibly trading while insolvent and therefore the directors can be accused of trading recklessely and if proven the directors can be held personally responsible.

The other problem that many companies have is that if they get aggressive with debtors the company is unlikely to get any further business from that debtor. Obviously you would be in a stronger if you were not operating in such a competive industry as you would be able to deny further supply until the account is brought up to date.

The government cannot step in as I am sure they will use the excuse that there are proceedures already in place ie the Courts. The problem there is that the Courts are not cheap and quite often people fear it is throwing good money after bad. However, perhaps you should let us know what sum of money you are chasing in order to possibly give you some ideas on how to approach the non paying debtors.

Also, what approach have you taken to date to get paid ie do you call them once a month and leave it at that or have you been "hounding" them for payment?
 
I guess people are paying those they have to pay first. Is there any way you can insist on some level of payment upfront before providing the goods or service you provide?
 
Fortunatley the amount I'm owed is just around 2K so not too bad when you hear of some cases. The people I supplied goods to were contractors and I checked with their customer (a state body) and they have been paid for this item unfortunately I cant go in and remove this from them. I have tried ringing and ringing and ringing but unfortunately I'm banging my head off a brick wall. As I said this sum wont send me to the wall but someone that would be paying an overdraft on this sum and maybe more I feel sorry for. For someone like me that if I cant afford to pay for something up front even though I take the 30 days given to me I cant understand the mentality of people that wont pay their bills.

I remember hearing an interview some months ago in Marian Finucane show with Robbie Fox and he was talking about the liquidators coming in and was very upset about it and someone rang in and said why did you keep on buying from your suppliers even though you knew you couldn't pay them and he tried to justify this and someone rang in and said because of what he did to him his business was gone to the wall and this is where I am coming from who can prevent people like him from ripping off decent people trying to scrape a living.

I'm sure people will try and justify the like of him saying that he gives employment and fair dues on him for going out and trying to make a success of himself but why must it be at others expense.

I hope I dont come over as bitter as I'm not as I said I've been lucky so far but in talking to others in small businesses like myself it seems to be a growing problem and everyone feel so helpless.
 
hans you do not sound bitter at all, totally understand where you are coming from. Unfortunately, people are slow to accept the end of their business and resort to living on credit well past the point of where current asssets are far less than their current liabilities.

Although you are not chasing much money i would think your constant telephone calls is the best way to go it would even be a great start if they could pay you say 100 a month for the next 20 months. I know this is a long time but it is better than nothing and fingers crossed they shoshould easily be able to afford it.
 
Hi Hans, know exactly how you feel - we're also a small company and are still owed money from over a year ago by a guy who flies around in a helicopter! If I had an RPG ..... ;)

Brendan posted this on 9th January - you can now use the Small Claims Court for debts up to €2000.

We have advised our bad debtor that if he doesn't pay within the next 2 weeks, that's where we're headed.

There's some information [broken link removed] from courts.ie on how to file.

There's also a very good post here from Vanilla on the procedure.
 
this is a great thread , one i think needs a forum on its own. i owed a ltd co €400 and when they rang me, it was a business i had given a lot of business to in the good years and i had always paid them, i thought it was to pay them ,BUT they had gone into liq and told me that the €400 i owed them was now the liq's problem and by the way did i want to take out another add. Now thats wrong.the liq settled for €50 with me. the problem i have with this situation as it stands now is that ltd co's can seem to easily close and no worries but someone like myself a sole trader can and will be pursued in place of the bigger co's as we are personally responsible for our, and rightly so, debts. Whereas irrisponsible ltd's seem to be able to walk away and start again , all bet's off.
 
I run a small business, I owe and am owed very large amounts of money, 15k and 70k respectively. I am very uncomfortable with having this level of debt (15k) as I generally try to pay what I buy within 30 days but my clients cant get paid so cant pay me in anything like a reasonable timeframe, I am afraid that this is the new reality in this country.

I am considering implementing a new plan I would be interested in some opinions on if businesses will accept it.

When service is booked I now issue 2 prices one based on payment within 30 days from date of invoice and a second price based on payment outside these terms.
 
I am pursuing a guy for something similar like Hans. I have secured a judgment against him and have put it in the hands of the sheriff. I have spent Euro 225.00 sofar. My view is, the guy in question is not going to get away with it. By the way, once you have a judgment you have leverage. If the debt is registered it will have all sorts of implications and people generally go to great lengths to avoid that.

The small claims court is only for private individuals, for company business you need to file in the district court.
 
Have read the post and can confirm, I stand corrected. My case pre-dates this new development. Thanks for the heads up
 
Delgirl that is very interesting I hadn't heard that businesses could now use the small claims court. That is certainly a start at least those with small amounts can use this service even though I hear a report on Pat Kenny last week saying there is a waiting time in Dublin of over a year to have your case heard in small claims court. My point was that there was no recognition of what was happening in small businesses regarding to payments so maybe something is beginning to happen. Maybe I'm too 'black and white' but I like to see protection for people that try and do the right thing.
 
Write to [broken link removed] if the waiting list for a claim to be heard in Dublin is 1 year - that's just not acceptable for a struggling small business.

My advice to any small busines who is owed money by larger businesses who are still trading and can pay is to keep at them until you receive payment.

So far, we have been successful in making all our debtors pay, even if it's a year later, and we intend to continue to pursue them.

Don't give up - that's exactly what they want.
 
I agree about not giving up a I've been after my only debt now for a year and I got part payment this morning (must be something in air after I started this thread). It is unfortunate that is often the people that shout loudest get paid first but it is wearysome constantly having to keep after these people. I know there are people out there that are in trouble but my advise is keep in contact with your debtors and work out something with them there is nothing worse than going underground and hoping it goes away just frustrating for everyone.
 
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