Debt Collection from a Serial CCJ Offender

It took just over 6 hours from first contact to recover a £3.2K debt from a civil engineering firm. Our client had provided tree surgery and arboriculture on land being repurposed for a Welsh A road. Contrary to stereotype, it’s not about shouting timber and filling the odd watering can! Our client was engaged by the debtor as a subcontractor and undertook five days of work using their highly qualified operatives.

Heavy Plant Crossing

Despite a £2M plus turnover, the debtor could never find a member of staff to process the invoice or make the payment. In the world of civil engineering, this debtor admittedly punches above their weight and is starting to compete with their more heavily resourced competitors. Growing a company without the finance to pay suppliers and hire staff can deal a fatal blow. There is no excuse for leaving suppliers wanting. At three months overdue, the client had enough of waiting and instructed Advocate Commercial Debt Recovery to recover the £3.2K.

Amber Beacons and Red Flags

Prior to commencing action Advocate reviews real-time credit reference data as a barometer of the debtor’s financial health. It’s not uncommon for Advocate to recover payment from companies with over 20 CCJs dating back 3-4 years. This civil engineering firm had an unusual and concerning history. In just two years, they had accumulated 24 CCJs amounting to £470K. On top of that, a number of creditors had posted adverse payment information to credit reference agencies suggesting 48% of invoices were being paid in excess of 90 days late. At the time of our instruction, half the judgments had been satisfied, leaving £290K of enforcement action still pending. Nothing says ‘cannot pay our debts’ like a collection of CCJs. Determined for our client not to be behind judgment number 25, a Notice of Insolvency Proceedings was issued.

Returning to Site

Contact with the debtor was made the morning after our instruction. The director was surprisingly familiar with the winding-up process. One could even suggest they prioritised creditors who had the backing of a debt collection agency to follow through with a petition. Most debtors have the ability to make ad-hoc payments, and those that don’t tend to have a lengthy set-up process. To their credit, this debtor got Advocate set up as a ‘supplier’ that morning, with a CHAPS payment received mid-afternoon. In recent years Advocate has seen an influx of new clients in the sector, so returning to the same debtor is increasingly common. Since this case, we have revisited the same civil engineering firm for another arboriculture client and recovered payment in a similar time frame!