Being sued for money owed

[cremeegg]

A friend (really) has been sued by a business for a significant sum of money in excess of €70,000.

This person went to their solicitor who has prepared a defence and engaged a barrister. A date has been set for court hearing.

There is no question that the money is owed. My friends business was badly hit by Covid but is running again and reasonably profitable.

My question is can or should my friend go to court. Can they not avoid the expense of court. What other options are there.

 

[mf1]

They should try and make a deal- either the whole lot or a reduced figure if the Plaintiff is feeling generous.

If the money is due, there is no defence so there is a good chance that if they do try and defend, they may find themselves hit for the entire debt and also costs.

If they can do a deal, they should try and agree on a phased payment basis over a period of time.

mf

 

[cremeegg]

Thanks for the reply.

Other than solicitors letter and court summons there has been no contact with the plaintiff. He has refused to take calls. This plaintiff took over the original creditors business last year and the debtor has never had any contact with him.

Is there such a thing as accepting a judgement without going to court.

 

[Brendan Burgess]

He can avoid going to court by paying what he owes?

If he is not able to pay it, he should take advice on insolvency or liquidation.

Is he a sole trader or a limited company?

If he can't pay it now, but intends to pay it, he could consent to the judgement.

Not sure why his solicitor and barrister are filing a defence if he accepts that the money is due?

How long is it outstanding? The guy suing him is probably being sued by others as his customers are not paying him.

Brendan

 

[cremeegg]

He can avoid going to court by paying what he owes?

Unfortunately he hasn't got the money in the short term.

If he is not able to pay it, he should take advice on insolvency or liquidation.

Is he a sole trader or a limited company?

The debt is owed by a sole trader, although he now operates his business through a Ltd Company. While insolvency or something similar may be inevitable, he is anxious to avoid that if possible. The business is his only income and he has 8 staff.

If he can't pay it now, but intends to pay it, he could consent to the judgement.

Not sure why his solicitor and barrister are filing a defence if he accepts that the money is due?

This is my uneasyness about the situation, why is his solicitor filing a defence, give or take a dispute over E5,000 in the calculation, he accepts he owes in excess of E75,000.

How does one go about consenting to judgement. Can he simply instruct his solicitor to consent to judgement in the amount of Exx ?

How long is it outstanding? The guy suing him is probably being sued by others as his customers are not paying him.

There have been arrears on the account for a number of years. I think the new owner has no interest in continuing to do business and just wants to get paid.

 

[Brendan Burgess]

Sounds as if he needs to change his solicitor. Some just take a "let's fight this".

If there is €5k in dispute, he should write to the creditor and say that he agrees to pay €70k and make a proposal to pay it.

But a Personal Insolvency Arrangement could see him retain his business and his home. He needs professional advice in this area.

A good PIP may write to the creditor and seek to negotiate it. Sometimes a creditor will sit up when an insolvency practitioner contacts them.

But if your friend has a lot of equity in his home, then the creditor will seek a judgement and then lodge the judgement against his home.

Brendan

 

[Jim2007]

The debt is owed by a sole trader, although he now operates his business through a Ltd Company.

This could be come very problematic if presented in an unfavorable light...

 

[TLO]

This plaintiff took over the original creditors business last year and the debtor has never had any contact with him.

Was the original creditor a Ltd company or a sole trader? If the original creditor was a sole trader then it's possible that the debt wasn't transferred properly to the plaintiff, in which case cremeegg's friend may well have a valid defense.