The creditor, a company based in South Wales, specialises in supplying mobility and safety products to developers and builders. Their debtor, also a company based in South Wales, carries out mobility adaption building services to bathrooms and kitchens. Both two parties had shared a good working relationship over several years. In fact, the creditor had recommended the debtor to many customers who had enquired about products and how they could get them installed.
No Payments for 4 Months Result in a £25,000 Debt
There had always been the odd issue with products, which were always replaced free of charge, or with some invoices not being paid on time. Issues that are all part of the trade and were accepted without concern by both parties. After not receiving a payment for four months, the creditor became concerned while the debtor continued to place orders for products at their usual pace, with no response to a series of telephone calls, emails and letters. The creditor decided to take action, place the account on stop and instruct a third party to recover the debt. This was the first time the company had had to take such action in over 15 years of trading, and it was not a decision they took lightly. At the point of Advocate Commercial Debt Recovery’s instruction, the creditor was owed almost £25,000.00, and cash flow was becoming a problem.
A Good Credit Rating and Money in the Bank
Upon receiving the instruction, the debtor’s financial position was profiled, and there was no obvious reason as to why they had built up such a large unpaid balance. The latest accounts filed at Companies House showed a healthy balance sheet, and the company was profitable, with significant cash in the bank and few liabilities. It was clear that the company could immediately pay the full outstanding balance to our client if they wanted to.
We issued the debtor with a Pre-Action Protocol compliant Notice of Court Proceedings demanding payment within seven days. The Notice clearly advised the company of the severe consequences of a County Court Judgment being registered against it. Despite this and the fact that additional late payment charges would apply if payment was not made before the expiry of the Notice, the debtor failed to respond.
Silence was Maintained, But Payment was Received
A seven-day Final Demand Notice, including the additional charges, was issued. Again, there was no response to either the postal notice, our emails, or our telephone messages. On the morning of the day that the Final Demand was due to expire, an email was sent to the debtor advising them that our solicitors were about to be instructed to issue a claim against them in the County Court. The email also advised on the Court fees and costs the debtor would incur and the effect a CCJ would have on the company’s ability to obtain credit.
Without notice, full payment, including the late payment charges and debt recovery costs, was received at 16.55 that day.
We are often asked how long it will take to recover a debt. It’s a difficult question to answer because we can never tell. Some debtors pay as soon as we contact them, and others, as with the above debtor, will wait until the very last minute to pay.