Overdue invoices- what legal action is next?

epicmoe

One of my clients owes about 6,500 in overdue invoices. I have sent reminders, talked to him on the phone and sent an email last week telling him to pay up by close of business this week, or face legal action.


What is the next step? is it the small claims court? what is the limit on the small claims court?

EDIT: I have spoken to the client, and he has assured me on a couple of occasions that it would be in "in a couple days" the first time this happened was two weeks ago (a few days after the term on the invoice was up). He said last week that the he put the payment through and it would definitely be in Tuesday (yesterday) after the bank holiday.
I am self employed.
There are other invoices for this client that are not overdue yet, but add up to about 20 grand.
Ive been talking to other people in the industry, and apparently I would not be the first person to get stiffed on the bill from this guy.

pedroeibar1

If you are a business the Small claims court does not cover you, nor is your amount 'small' as the SCC cap is €2k.

What do you know about the debtor? Can the issue be resolved outside of legal? Have you met to discuss it? Is he good for the amount? No point in suing if it is a company and illiquid. How long has the debt been outstanding?

If you think you have a hope of recovery you need to send a formal demand letter, demanding payment in full by x date (10 days). You follow that up with a solicitors letter.

katiek102010

There are specific steps you have to follow or else the case will get thrown out of court.

You cannot do small claims.

My best advice is you need to get a solicitor ASAP. I would try physically going to the client and meeting them face to face and if that doesn't work go to solicitor on the way back

epicmoe

I have spoken to the client, and he has assured me on a couple of occasions that it would be in "in a couple days" the first time this happened was two weeks ago (a few days after the term on the invoice was up). He said last week that the he put the payment through and it would definitely be in Tuesday (yesterday) after the bank holiday.
I am self employed.

Bandara

epicmoe wrote: »

I have spoken to the client, and he has assured me on a couple of occasions that it would be in "in a couple days" the first time this happened was two weeks ago (a few days after the term on the invoice was up). He said last week that the he put the payment through and it would definitely be in Tuesday (yesterday) after the bank holiday.
I am self employed.

Your being setup here to be shafted for this. He is delaying obviously and may be planning on ceasing business so paying his bills isn’t a priority for the guy obviously.

You really need to start getting serious, your facing 20k plus of a loss if he shuts down and liquidates etc.

You need to turn up at his office, demand payment is done immediately and you witness the screen shot saying payment made. Or tbh I would consider a debt collector, and one that will be taken seriously.

Some people here won’t agree but I’ve used http://www.viperdebtrecovery.com/ a good few years back. Yes there are unsavoury background but they were very professional to deal with and they secured a large sum that I was never going to get and the guy was planning on shafting all his suppliers and had ordered large amounts of goods purposely to run up his debts and sell the goods off heavily discounted for cash within the trade and pocket the money before shutting down. You owe me money, and your deliberately planning on shafting me ? then the gloves are off.

I do hope you have stopped all dealings either him and are not supplying goods or services etc

BobMc

I've been in your shoes, unfortunately irish legal system is of little to no use.

Best keep pressure on to collect outstanding amounts, but withdraw any further credit, be prepared to lose business from
client going forward, its your money owed but its not viewed as such by client and you are a nuisance now

its tough, been a few years since i got stung, pulled one co. from credit and was paid cleared, went bust not 6 weeks later

epicmoe

Bandara wrote: »

Your being setup here to be shafted for this. He is delaying obviously and may be planning on ceasing business so paying his bills isn’t a priority for the guy obviously.

You really need to start getting serious, your facing 20k plus of a loss if he shuts down and liquidates etc.

You need to turn up at his office, demand payment is done immediately and you witness the screen shot saying payment made. Or tbh I would consider a debt collector, and one that will be taken seriously.

Some people here won’t agree but I’ve used http://www.viperdebtrecovery.com/ a good few years back. Yes there are unsavoury background but they were very professional to deal with and they secured a large sum that I was never going to get and the guy was planning on shafting all his suppliers and had ordered large amounts of goods purposely to run up his debts and sell the goods off heavily discounted for cash within the trade and pocket the money before shutting down. You owe me money, and your deliberately planning on shafting me ? then the gloves are off.

I do hope you have stopped all dealings either him and are not supplying goods or services etc

I will not be dealing with this guy again.
What sort of commission did those debt collectors charge, Im considering it

is_that_so

I also know someone who after 3 months got a debt recovery agency involved and it was very straightforward and handled quickly. Sure there is a cost but the client will have a debt registered against them. Making them an ex-client ASAP is probably the best move.

drunkmonkey

epicmoe wrote: »

I have spoken to the client, and he has assured me on a couple of occasions that it would be in "in a couple days" the first time this happened was two weeks ago (a few days after the term on the invoice was up). He said last week that the he put the payment through and it would definitely be in Tuesday (yesterday) after the bank holiday.
I am self employed.

I'd give it until 2 .30 today to see does the payment go through we all probably know it won't but just in case it is a bank delay. If it does't appear I wouldn't call making any threats just call to say the money hasn't arrived and have they transaction number and bank details so you can have a word with your bank to chase it up.
Say nothing then as he'll either give you the transaction details or have to put his hands in the air and say he didn't do it. Then you can request he does it today, and you should have payment tomorrow.

Don't rock up demanding payment as anything could happen. Leave it to the solicitor.

Careful with using legal action as a way to force payment, if there used to it then know they can drag out payment for ages and settle at the last minute. They may call your bluff like you'll be doing looking for the transaction details.

epicmoe

BobMc wrote: »

I've been in your shoes, unfortunately irish legal system is of little to no use.

Best keep pressure on to collect outstanding amounts, but withdraw any further credit, be prepared to lose business from
client going forward, its your money owed but its not viewed as such by client and you are a nuisance now

its tough, been a few years since i got stung, pulled one co. from credit and was paid cleared, went bust not 6 weeks later

Im certainly not going to be dealing with this guy again, most of my other clients pay within a week of issuing the invoice. I don't need to be dealing with gob****es like this.

Bandara

epicmoe wrote: »

I will not be dealing with this guy again.
What sort of commission did those debt collectors charge, Im considering it

Depends on the complexity of the collection (debts based in multiple countries etc) amounts involved etc etc. Anything from 15%-40%

I’d definitely speak with them. You are days away from getting nothing imho.


To be clear I have zero affiliation with the company I have mentioned. I was a customer of theirs in which they recovered a significant amount when there was basically no chance I was ever going to be paid, and to my knowledge I was the only one who was paid before the customer did pull the shutters weeks later leaving deliberately hugely inflated debts behind.

Trojan

There are several debt collection options from a very polite but relentless lady who will call your debtor every day, up to what I'd consider slightly more nuclear options like Bandara went for. (I say now that I wouldn't like to hire those guys, but if faced with a non-payment of €20k I might reconsider that view).

pedroeibar1

pedroeibar1 wrote: »

What do you know about the debtor? Can the issue be resolved outside of legal? Have you met to discuss it? Is he good for the amount? No point in suing if it is a company and illiquid. How long has the debt been outstanding?

The above are key questions, particularly age of debt/details of debtor. None have been answered by the OP. Is the debtor a Ltd Co or a sole trader? How watertight is the paperwork? How old is the debt? - Collection success is inversely proportional to age of debt. I'm of Trojan's view (unusually) rather than Bandara's. If the OP doesn't give proper info he won't get proper advice.

RangeR

pedroeibar1 wrote: »

The above are key questions, particularly age of debt/details of debtor. None have been answered by the OP. Is the debtor a Ltd Co or a sole trader? How watertight is the paperwork? How old is the debt? - Collection success is inversely proportional to age of debt. I'm of Trojan's view (unusually) rather than Bandara's. If the OP doesn't give proper info he won't get proper advice.

Actually, he did give the debt age...

epicmoe wrote: »

... the first time this happened was two weeks ago (a few days after the term on the invoice was up).

There are other invoices for this client that are not overdue yet, but add up to about 20 grand.

pedroeibar1

RangeR wrote: »

Actually, he did give the debt age...

No, the age of the debt was not given. All we know is that some invoices are a couple of weeks overdue and that there is a further 20k outstanding but not yet due. We do not know the credit period, nor the debtor type nor is there is the possibility of ROT, etc.Was the credit period appropriate to the sector? Lots of unknowns...........

MrGaryFox

All very solid advice here. I was/am in the middle of a similar situation. Situation has turned to be a complete time drain and the guy is deeply unpleasant to deal with. He is in the middle of a payment plan to pay the debt off over the course of a year but its a nightmare. Have to remind him each month, he then abuses me before eventually paying that month's installment.

If I had a similar situation in the future, I'll be giving it over to a debt collection agency immediately. Once you have tried to collect it yourself and issued a final warning, I wouldn't waste my time in future.

pedroeibar1

MrGaryFox wrote: »

All very solid advice here. I was/am in the middle of a similar situation. Situation has turned to be a complete time drain and the guy is deeply unpleasant to deal with. He is in the middle of a payment plan to pay the debt off over the course of a year but its a nightmare. Have to remind him each month, he then abuses me before eventually paying that month's installment.

If I had a similar situation in the future, I'll be giving it over to a debt collection agency immediately. Once you have tried to collect it yourself and issued a final warning, I wouldn't waste my time in future.

The important thing is not to slide into a collection situation carelessly. Too many suppliers ignore basic credit control - first, know your customer; the "Ah shur he's grand" attitude is still commonplace in Ireland. Do a credit check, open a proper credit register file , log the details and terms of business and ensure they are on the invoice. Ensure credit terms are appropriate - no point in stipulating 30 days if the debtor has to process and then sells on 60 days eom. Know what you are getting into. Immediately jump on top of any overdue debt. The longer it is outstanding the harder it is to collect and the lower the chances of success. Never bluff with a threat - say it, then act on it. One threat is to say you are passing the debt to a credit insurer for collection - if the debtor has any cop s/he will realise that they will be 'blacked', its other suppliers will know and s/he will be more prepared to pay/negotiate.

sderiis

What do you know about the debtor? Can the issue be resolved outside of legal? Have you met to discuss it? Is he good for the amount? No point in suing if it is a company and illiquid. How long has the debt been outstanding?

is_that_so

MrGaryFox wrote: »

All very solid advice here. I was/am in the middle of a similar situation. Situation has turned to be a complete time drain and the guy is deeply unpleasant to deal with. He is in the middle of a payment plan to pay the debt off over the course of a year but its a nightmare. Have to remind him each month, he then abuses me before eventually paying that month's installment.

If I had a similar situation in the future, I'll be giving it over to a debt collection agency immediately. Once you have tried to collect it yourself and issued a final warning, I wouldn't waste my time in future.

Eye on the prize as they say and don't rise to the abuse. Be sure to thank him profusely for each of the payments!

SEPT 23 1989

One thing I learned from trading through and after the last recession was any messing with payment the customer gets dumped

Never let it build up

Plenty more of these threads will appear in the next few months unfortunately