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Worcestershire Electrical and Security System Contractor

The creditor, an Evesham-based Electrical Contractor and Security System Specialist, instructed us to recover payment of an invoice of £2,376.00 issued four months earlier on 10-day payment terms. The debtor, an Oxfordshire-based Housing Developer, had instructed our client to supply and install four burglar alarm systems to four new-build houses being built in a Worcestershire village.

The works were completed on time, signed off and, our client promptly issued their invoice. Following three months of sending statements, reminders and, chasing the debt, our client received an email remittance advice. However, no payment materialised and, after another month of chasing for payment and being ignored, Advocate Debt Recovery received the instruction to recover the debt.

The client’s instruction included some interesting comments and information on what appeared to be the precarious financial position of the debtor. There were many reports of unpaid invoices from several other small businesses who had worked on the development being ignored. Our client was aware that a window installation company, a carpentry firm, a plumbing and heating company and a landscaping company were amongst those with unpaid invoices which were being ignored.

Relying on the use of creditor Funds

The general consensus of the unpaid suppliers was that the developer was struggling with cash flow issues. The developer was relying on using funds that should have been paid to suppliers to complete the project to the point that home sales would be completed to release funds to creditors, including our client. An initial check on the debtor confirmed that there were no Court Judgments currently registered against the company. This was significant, as our client was aware of a supplier who had issued Court proceedings against the debtor three months earlier.

Given the track record of the debtor, there would doubtless have been other creditors who had taken the same action. It appeared that the debtor would pay upon the threat or issue of Court proceedings. With many other creditors also considering legal proceedings against the debtor company, it was imperative to take action quickly and place our client at the very front of the queue for payment.  

We issued a seven-day Notice by post and email on the day of instruction and commenced telephone contact on day 3. It quickly became clear that the debtor intended to continue to bury their head in the sand and ignore all correspondence. The initial Notice expired without response, and a seven-day day Final Demand Notice was issued. The Final Demand Notice clearly explained the consequences and additional costs that would be incurred if the debt was not settled and the matter proceeded to Court.

Last-minute payment prevents Court proceedings

With Court proceedings looming on the morning of the expiry date of the Final Demand Notice and without any acknowledgment from the debtor, full payment was received to Advocate’s bank account, including our fees. The full invoice value of £2,376.00 was transferred to our client’s bank account the same day via a faster payment.

While many debtors will pay as soon as they receive our correspondence or within the initial seven-day period, sadly, a few will leave it until the very last minute. However, that is only 14 days from when you instruct us to commence our action.

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