Scaffolding Invoice Paid before Liquidation

Advocate has recovered £1.4K just weeks before the debtor ceased trading. Our fortunate client is an East Midlands scaffolding wholesaler and manufacturer. Their customers erect scaffolding on civil and commercial construction projects. Trading for over thirty years our client has a multi-million-pound turnover trading in multiple sectors of the construction industry. The debt was not a large sum in comparison to the rest of our client’s ledger, but it was proving to be unnecessarily time-consuming.

Putting Up with Nothing

In stark contrast to our client, the debtor was a fledgling business with the first accounts not yet due. Set up in the height of recession the debtor was trying to gain a footing where more established players had already lost theirs. It’s a high-risk way to start a business with bountiful rewards on offer if successful. Having supplied the debtor with enough equipment to fulfil a new contract, our client expected payment on terms of 30 days end of the month. Initial letters and telephone messages were ignored. Then payment was repeatedly promised before failing to arrive. A token payment was received before communication dried up. At the time of instruction, the £1.4K debt was 88-149 days overdue and our client was running out of patience.

Talking Framework

Upon instruction, the debtor attempted to ignore the threat of Court proceedings hoping it would go away. Persistence and repeated contact soon changed their approach. The director’s initial feedback was to request a payment plan lasting 10 weeks. Our client had previously advised such duration was unacceptable. All sides then agreed 50% upfront and the balance at month-end which the debtor reneged on 12 hours later. Several other instalment proposals were put forward with the debtor continuing to insist they did not have enough money to make a substantial initial payment. Regardless of how long a duration the debtor is touting, the clock keeps ticking down. Negotiations do not place a hold on our action. Knowing the limits to our client’s grace and what the courts deem reasonable, Advocate pushed for payment within a fair time frame. Our action progressed and 7 days after the first notice, a Final Demand was sent.

Taking the Boards Down

Less than 24 hours after the Final Demand was issued, the debtor did a textbook U-turn. Full payment of £1.4K was received along with the additional statutory charges incurred with the Final Demand. Shortly after Advocate recovered payment the debtor ceased trading. Our client breathed a sigh of relief knowing had they delayed Advocate’s intervention further, the debt wouldn’t have been recoverable in liquidation.

Incidentally, Advocate first encountered the client as a debtor several years ago and was impressed with our efficiency and focus. We’ve since been engaged on a regular basis collecting debts for their customers who fail to pay for scaffolding supplies.