Unpaid invoices query

audiem

Hello

New here, hoping I could get some help with a query about unpaid invoices. Not sure if I should post this in legal so apologies if in the wrong forum, I'll move. (also I know there are similar queries here, I did search, but not that match my specific issue)

Basically I'm wondering what recourse I have for unpaid invoices from four years ago, as below.

Four years ago I worked as an freelancer for a company. The company is still functioning, successful, and very solvent. I invoiced them on a regular basis in the format they requested and the first few invoices they paid, not promptly by any means but in full. They then stopped paying my invoices and they began to build up until they were a significant amount and I stopped working for the company. I contacted the accountant numerous times over a couple of years on a regular basis to chase payment, but she never replied to an email and wouldn't take my calls except one where she told me that they couldn't afford to pay me. This was untrue as other freelancers I know were being paid. I gave up calling and emailing for about a year when I was away travelling and then last year I began to request payment again. My emails were ignored again, so I kept calling until I got through to the accountant who said that the company was not in a position to pay me in the past due to cashflow problems and that I had stopped looking for payment myself. I remained calm and pleasant throughout the call but she became, somewhat inexplicably, aggressive, suggesting that I was trying to get them to pay invoices already paid and laughing at me for asking her to explain an accountancy term she used before hanging up on me while I was mid-sentence. I've emailed another accountant in the company that she passed me off to but no reply. I've requested email receipts and haven't received them but it's the correct email addresses for both accountants so they are getting them.

I have kept every email of invoice and requests for payment over four years, a spreadsheet of invoices paid and unpaid and bank account statements for four years with all the company's payments highlighted. The only thing I don't have is I didn't make a log of the phone calls unfortunately.

One thing I am concerned about is that the accountant said that the onus of proving that they didn't pay me is on me - now I have records (via the bank statements) of them paying me the first year or so of invoices but I don't see how I can prove they didn't pay me - I have bank statements that show that no payments were received after a certain date but what if they say they paid me cheque or into another account? Surely the onus is on them to provide proof that they did?

Can anyone tell me what option I have - I was thinking maybe I should get a solicitor but I'm not sure if that's more of a last resort - should I be going to Small Claims Court or making a complaint elsewhere first? And also, am I too late because the statue of limitations is four or five years I think - have they possibly delayed me so that they can avoid paying me legally that way?

Thanks so much to anyone that manages to read all of that - pretty boring stuff.....and thanks in advance for any help, I'm really unsure of what I'm supposed to do in this situation

mlumley

If the amount is over £750 you can ask for the co\; iirc to be wound up. That will make them pay up very fast.

audiem

mlumley wrote: »

If the amount is over £750 you can ask for the co\; iirc to be wound up. That will make them pay up very fast.

Hi mlumley, thanks for the response. Sorry - can I ask what that is...?! The invoice is over £750

Gloomtastic!

The onus now on you to prove they haven't paid? Never heard that one before!!! If you sue them for the money they will be able to prove via their records, payment date, cheque cleared date etc. If they haven't paid, they won't. Simple.

audiem

Gloomtastic! wrote: »

The onus now on you to prove they haven't paid? Never heard that one before!!! If you sue them for the money they will be able to prove via their records, payment date, cheque cleared date etc. If they haven't paid, they won't. Simple.

I think they are assuming that I won't sue, and tbh - I'm a bit aprehensive about doing something so serious. Do you know what if any other options I'd have before going down that road? Thanks for your help

Gloomtastic!

audiem wrote: »

I think they are assuming that I won't sue, and tbh - I'm a bit aprehensive about doing something so serious. Do you know what if any other options I'd have before going down that road? Thanks for your help

They are stealing your money. You earned it!

Alternatives to suing them include:

1) Doorstepping. You sit in their reception and refuse to leave until you get paid.
2) Debt Recovery Agents. You sell your debt to a company and they pursue the company. Not sure how much they'll pay you but it could be about 10% of the original debt.
3) Engage a solicitor to chase the debt. I think if the debt is over a certain amount and you win, then the debtor has to pay your legal costs - it is in the UK.

Regardless of what you chose to do. If you say to them you are going to do x to get your money back. Make sure you do it.

GrumpyMe

audiem wrote: »

...Do you know what if any other options ...

I'd guess you won't be doing business with this client again - so do read up and apply "Late Payments in Commercial Transactions Regulations 2012" as appropriate! Google "Late Payments in Commercial Transactions Regulations 2012" and the Department of Justice Enterprise and Innovation link should be #1 or #2 hit!

There is an old post at irishbusinesswomen.com/forum/viewtopic.php?f=4&t=12185
that makes interesting reading too as to how to proceed...
Google "The "Unpaid Invoices" Problem...." and again, it should be first or second hit! I'm not recommending any of the service providers mentioned just the process/procedures mentioned...
HTH and good luck!

audiem

Thanks for the replies. I've decided I'm going to get a solictor. If I don't, nothing will happen and I've had this happen before with small amounts - but this is the last straw.

GrumpyMe wrote: »

I'd guess you won't be doing business with this client again - so do read up and apply "Late Payments in Commercial Transactions Regulations 2012" as appropriate! Google "Late Payments in Commercial Transactions Regulations 2012" and the Department of Justice Enterprise and Innovation link should be #1 or #2 hit!

There is an old post at irishbusinesswomen.com/forum/viewtopic.php?f=4&t=12185
that makes interesting reading too as to how to proceed...
Google "The "Unpaid Invoices" Problem...." and again, it should be first or second hit! I'm not recommending any of the service providers mentioned just the process/procedures mentioned...
HTH and good luck!

This is very interesting reading, thanks GrumpyMe - when I've found a solicitor I'm going to mention it to them

Fingers crossed...

daveohdave

Let us know how you get on please. Plenty of them out their chancing their arms.

dbran

Hi

It seems as you have exhausted all of the normal channels of payment and the chances of you getting paid easily are not good.

It is a pity that you waited a year as the question will be asked as to why you waited for so long before you took action. That is why they now think that if they stone wall long enough you will just go away.

However, your next move will depend on the amount of money involved. If it is a small amount then any amount recovered will be swallowed up by the solicitors fees and it may not be worth it. Also the legal system is built to give the debtor all of the power and they can frustrate the process and drag it out for months and months without having to spend a penny other then to return meaningless forms. Meanwhile you have to spend all the money taking them to court etc. And if the company does not have any money it is just a waste of time.

A good option may be to hire a debt collection agency to persue them. They will persue them until it is clear that they are not going to pay and take a percentage of the proceeds. (I know a good one if you are interested PM me.)

You cant really doorstep them anymore unless you work for the viper.

Best of luck with it.

dbran

audiem

dbran wrote: »

Hi

It seems as you have exhausted all of the normal channels of payment and the chances of you getting paid easily are not good.

It is a pity that you waited a year as the question will be asked as to why you waited for so long before you took action. That is why they now think that if they stone wall long enough you will just go away.

However, your next move will depend on the amount of money involved. If it is a small amount then any amount recovered will be swallowed up by the solicitors fees and it may not be worth it. Also the legal system is built to give the debtor all of the power and they can frustrate the process and drag it out for months and months without having to spend a penny other then to return meaningless forms. Meanwhile you have to spend all the money taking them to court etc. And if the company does not have any money it is just a waste of time.

A good option may be to hire a debt collection agency to persue them. They will persue them until it is clear that they are not going to pay and take a percentage of the proceeds. (I know a good one if you are interested PM me.)

You cant really doorstep them anymore unless you work for the viper.

Best of luck with it.

dbran

Thanks for the response dbran

With regards waiting a year, it wasn't that I invoiced them, waited a year and then started pursuing it - it was that I invoiced them, and then for a couple of years after (and immediately) that sent frequent and regular requests for payment until I was out of the country and couldn't really concentrate on it for a period of time. Even if I hadn't hassled them as much as I did (and I did a lot) I don't really see how they can argue that point though - they can't really be absolved of their debt to me just because I didn't call them everyday asking for it! I did wonder if they were trying to wait until the statute of limitations rendered my invoice void but in reality I think it was more laziness and me being a low priority creditor.

Thanks but I think I'd prefer to go solictor rather than debt collector - someone was saying you only sell for about 10%? I think if I'm still within the statute of limitations I'll go the legal road.

I'll come back and let you know how I get on, hopefully with good news! Thanks for the help

barneystinson

audiem wrote: »

Thanks for the response dbran

With regards waiting a year, it wasn't that I invoiced them, waited a year and then started pursuing it - it was that I invoiced them, and then for a couple of years after (and immediately) that sent frequent and regular requests for payment until I was out of the country and couldn't really concentrate on it for a period of time. Even if I hadn't hassled them as much as I did (and I did a lot) I don't really see how they can argue that point though - they can't really be absolved of their debt to me just because I didn't call them everyday asking for it! I did wonder if they were trying to wait until the statute of limitations rendered my invoice void but in reality I think it was more laziness and me being a low priority creditor.

Thanks but I think I'd prefer to go solictor rather than debt collector - someone was saying you only sell for about 10%? I think if I'm still within the statute of limitations I'll go the legal road.

I'll come back and let you know how I get on, hopefully with good news! Thanks for the help

You do realise a solicitor may well get you an order for all your money, and then charge you so much for the privilege that you'll get diddly squat after you've paid them?! A lesser % of something, up front now, may be better than a possible 100% of nothing (or 100% of a negative if your legal route fails and you still owe the solicitor!)...

Gloomtastic!

I mentioned that Debt Recovety Agents might pay 10c in the € but have never dealt with one. Does anyone actually know what they pay?

dbran

Hi

Debt recovery agents usually collect between 10% and 15% of the debt that is recovered depending on how much work they have to do.However they have no real legal power and some debtors just ignore them until they see a solicitors letter.

My understanding is a solicitor has to charge you whether or not you are successful. But that shows you are deadly serious and you are willing to go all the way and do whatever it takes to get paid. That sends a powerfull message to the debtor.

They may very well pay up straight away or they may hold out until the last minute.

Regards

dbran

dbran

barneystinson wrote: »

You do realise a solicitor may well get you an order for all your money, and then charge you so much for the privilege that you'll get diddly squat after you've paid them?! A lesser % of something, up front now, may be better than a possible 100% of nothing (or 100% of a negative if your legal route fails and you still owe the solicitor!)...

And dont forget, getting an order for recovery of the money is just the start. You then have to arrange for a sherrif to call at the premises and execute the decree. If there is nothing there that is owned by the debtor company you get zero.

skelligs

Get a solicitor to issue 7 day notice and then issue district court proceedings. All costs are payable by the company that owes you.

To defend it, they must enter a resonable defense within 14 days ( I think), otherwise the judgement aoutomatically applies against them along with fixed costs.

Once the judgement is registered you can get sheriff to collect - again the company pays all the sheriff costs.

Usually you find they will pay as soon as they receive court documents.

pedroeibar1

There is some mixed advice already posted, some good, some nonsense. Debt collection is never ordinary - it can be easy or excruciatingly difficult.

The first thing to recognize is that the longer you leave a debt, the more difficult it is to collect and the lower the collection success rate. Staying on top of debtors is what credit control is about, for good reason. Your delay has seriously endangered your chances of success.

You have hinted that the amount is ‘over €750’ so I’m assuming it’s €1 - 5k. I’m also assuming that the debtor is a company of some financial standing and worth chasing. Forget about ‘selling’ the debt, it is too small, nobody will be bothered with it, and those that might (at that €€level) will rip you off.

Seriously consider your next action –is it worth the hassle and aggravation? Will it detract from your other work? What are the chances of success? What are the chances of eventually getting paid? If you lose you will end up paying your own costs and also those of the debtor. Expensive.

The next thing is to gather all your documentation, because once you set recovery proceedings in motion the money meter is running. You need everything to hand because the debtor will try to avoid payment, will say they never got the invoice, that the work was not satisfactory or in accordance with the contract, there were snags. They will do anything to delay payment.

The choice is collection agency or straight to legal. The better collection agencies will give you an indication in advance of cost and advisability of success. They will probably charge out of pocket expenses and 20% of the recovered amount. They get you to assign the debt to them, so effectively they are standing in your shoes and have every legal right to collect/issue proceedings/ whatever.
It you go the road on your own, you need to demand payment by means of a 7-day letter i.e. you give the debtor 7 days to pay or ‘I will refer the matter to my solicitor to institute proceedings to protect my interests’. (A solicitor will send that letter for about 50 – 100 quid.) That should be sent to the debtor’s Co. Sec by registered mail. Now you have to go to your solicitor (if s/he did not send the letter) who will initiate proceedings. You need to go through this with your solicitor who will advise you. You need to prove the debt is due, something that is not always clear-cut. The debtor usually will again delay things at this stage by querying invoices, work, etc. The case then takes a place in the queue. You might be made an offer of settlement (F.O. Money!) and it might be an idea to consider taking it. At what €€ level would you be happy to settle?

Eventually, if you win, you will ‘obtain judgement’. That means the debtor is ordered by the court to pay you. You can threaten to register the judgement against them If they do not pay, (a blot on their credit record) and then execute the judgement i. e. the Sheriff is given the court order to go and seize goods to the value of the debt. The day the sheriff arrives the debtor could decide to pull the plug and you get nothing (and your solicitor will still be looking for his fees, from YOU)

I have found that the credit insurers’ collection companies are very effective because most debtors recognize that their credit reputations will be badly damaged if they upset the insurers. I'm not sure if this is still available in Ireland. Also, its years since I had to issue proceedings here so some nuances might have changed, but the gist is +/- correct.

daveohdave

In don't believe any of the Irish debt collection agencies are members of the credit bureau, which would prevent them from affecting credit records.

professore

Gloomtastic! wrote: »

I mentioned that Debt Recovety Agents might pay 10c in the € but have never dealt with one. Does anyone actually know what they pay?

You get about 70% and they take about 30% in my experience. Also depends on the amount involved, my amount was relatively small.

pedroeibar1

daveohdave wrote: »

In don't believe any of the Irish debt collection agencies are members of the credit bureau, which would prevent them from affecting credit records.

Nothing to do with the OP.
A judgement can be registered against a company or an individual. Either way it goes on the record in the Court, is thus picked up by Stubbs, D&B, Experian and published. The threat of 'registering' a judgement usually is enough to make a debtor face reality.

pedroeibar1

professore wrote: »

You get about 70% and they take about 30% in my experience. Also depends on the amount involved, my amount was relatively small.

I have bought and sold trade debt for 30 - 70% of face value (Six/seven figure amounts) . Not in this jurisdiction. I've known of up to 90% to be paid in the US, but that was in special cases where there was a big incentive to use it for a debt/equity swap in Chapter 11 cases. All of that is out of the OP's league tho...:)

dbran

Hi

A debt collection agency will chase the debt for you as if it were your own credit control department and they would usually take on debts of less then €1,000 try to arrange a settlement etc or tell you that you have no chance if that is the case. The percentage is as I said previously 10%-15% of the debt recovered. I have collected on debts which I had previously thought were lost causes in this manner. They will not take over the debt from you, this would be more of a debt factoring arrangement. Debt factors would normally only take over good debts that are collectable and are a form of finance rather then credit control. If any of the debts are uncollectable they will assign them back to you.

If you go legal you have to pay pay pay again for every single stage and the debtor does not have to pay or do anything other then to frustrate and sit tight long enough for you to give up.

I found the "steps" to be as follows

Seven day notice - pay a solicitor

Send the demand to registered office of the company by registered mail. If the debtor refuses to sign the letter this makes the service of the notice invalid. You then have to go back to court to allow normal service to be valid- pay the solicitor and give the debtor an extra months delay.

Finally served effective notice. Debtor then enters a notice to defend within 10 days. Now here's the stinker!! He dose not have to actually have any intention to defend at all. He does not even have to give the grounds of his defence. But the effect of this is that it must go for a full hearing in the court where you now have to pay for a solicitor and a barrister and you must also give up your own time to attend court in person. Another 3 months delay!!!

Day of the hearing comes and the F***er dosen't even turn up. Yet I have to spend the morning in the district court where I win my case and get the court order.

Now I have to pay to get a sheriff to visit the debtors premises to see if he has anything that can be taken in lieu of the debt. At this point the guy is now trading as another limited company having had plenty of time to organise things so guess what no assets. I also have to pay to advertise the judgement in stubs gazette. But the company is now dormant, so that means nothing.

This guy owed me money fair and square for work that was done and he walked away from his debts and unfortunately the courts helped him to do it. If you were to look up this person's name you would not know that he doesn't pay. There are no red flags for any of his companies even though I have judgements for over €4000 for two of them.

So if it is a small debt do yourself a favour, get a debt collection agency or write it off. Don't whatever you do waste your time and money going legal with it.

dbran

SpaceTime

I would send a copy of all unpaid invoices and a letter explaining that you'll pursue it legally to the company directors (as per their CRO registered addresses) by registered mail.

This has gotten me rapid responses in the past as they're often unaware of the situation.

The information is available on www.cro.ie if you do a company / business name search.

Just a firm, business like letter pointing out the outstanding balance and copy invoices.

Also, I think you're possibly entitled to change them interested and even late fees to cover your administration costs.
You should check with an accountant.

mickdw

There was an interesting case on tv where someone got a judgement against a large multi national computer company for about 5k. Sheriff turned up at large premises. The business thought they could make the Sheriff play by their roles I.e. No access to the property without management permission etc. He told them he was coming in at x time, using force if necessary and would removing equipment as he saw fit to cover the debt.
A cheque appeared rather quickly but it was quite strange. This was a household name in computers, not some outsourced business.
I also personally know of a case in Ireland where a small business attempted to have a large building company wound up over a 10k unpaid debt. I don't know anything about this process but he got paid quickly.

SpaceTime

I'm very understanding of one or two of my customers who genuinely have cash flow issues. They always pay, they might just be late and they always explain that they're late and make every effort to pay on time. One company even dropped me a late cheque and a box of chocolates.

What I get annoyed about is arrogant types who try to get free work and get high and mighty about not paying or who deliberately make you wait 90 days and expect you to keep working.

I just avoid dealing with companies like that entirely.

I had one guy who got angry with me because o wasn't responding to emails or calls from him asking me to do more work when he had 3 invoices outstanding!!

I need to be able to buy food and pay bills & I'm not running a charity.


my credit control policy is similar to eircom!
Unpaid bill = no service & no support and possibly being put on prepayment plan!

pedroeibar1

dbran wrote: »

Hi

..........At this point the guy is now trading as another limited company having had plenty of time to organise things so guess what no assets. I also have to pay to advertise the judgement in stubs gazette. But the company is now dormant, so that means nothing.

This guy owed me money fair and square for work that was done and he walked away from his debts and unfortunately the courts helped him to do it. If you were to look up this person's name you would not know that he doesn't pay. There are no red flags for any of his companies even though I have judgements for over €4000 for two of them.

dbran

I'm curious. Why did you not register the judgements against his companies? How did the courts 'help' this guy to walk from his debts? Directors of a company cannot just 'walk' from a company and leave it in an insolvent condition. Have you not approached the ODCE? (Not that I would expect much there, but it would be interesting to know their comments.)

dbran

Hi

I have indeed registered the judgements against his companies in stubs gazette obtained from the district court.

The courts helped this guy because they took so long to process the case, he was able to cease trading from the company that incurred the debt and move the trade into another company. The courts philosophy seems to be to give as much time as possible so both parties resolve their differences out of court which is all good and well. But if the guy has no intention on reaching any sort of compromise with you then this delay only serves to increase the costs that the person who is owed the money has to incur and the debtor can in the mean time safely abandon the company.

"Directors of a company cannot just 'walk' from a company and leave it in an insolvent condition."

In theory no but in practice unfortunately yes. I am now owed money from a company that was trading but now alas is now dormant and insolvent. If I had money to burn I could petition the court to have the company wound up. Hell, I could even get the directors to appear in court and give an explanation of what they did with the money. It wont get me any closer to being paid unfortunately and it would cost a fortune in legal bills.

There is of course fraudulent trading, but that is very hard to prove as you cannot really know what was in the mind of the director at any point and you cannot otherwise make them personally liable for the debts of the company.

"Have you not approached the ODCE?"
He has not broken any company law so long as he continues to file the company's returns in cro on time. If he allows the company to be struck off or is stupid enough to go for a voluntary strike off I will get the ODCE involved. That wont cost me anything but it remains to be seen what they would do in reality.

One for experience unfortunately.:rolleyes:

dbran

pedroeibar1

Thanks dbran for taking the trouble to explain/detail all of that.

I see your predicament, no point in putting out good money after bad. In your case I would be slow to give up particularly if the current business of the debtor is profitable. Have you spoken with other creditors? Would you be able to prove that he has transferred assets out of the debtor company to his new venture? If so he would be in breach of Company law as IMO he would be a ‘connected person’? Also I wonder how he has treated other creditors, e.g. small guys versus the Revenue, fraudulent preference..... What about the auditor statement on the 'going concern' nature of the business? If it is struck off he will lose the protection of limited liability, so keep an eye on it.

Would getting a credit insurer involved as your collection agent add anything? Might that provoke an offer?- I realise the debtor company is insolvent, but by passing the account to a credit insurer for collection it is a means of getting them to ‘blacklist’ him and his new company on their system and obtaining credit would become more difficult for him.
I know it's too late now, but for difficult debts I always was a big believer in the ‘Winding up order’ alluded to by another poster above. Generally I found it worked.

Amazing to realize that we are 14 years on from the first CLRG report and b#gger all has happened since the publication of the Bill a year and a half ago.

pedronomix

A day late and a dollar short for credit insurance!!

pedroeibar1

pedronomix wrote: »

A day late and a dollar short for credit insurance!!

Missing my point Pedronomix – my suggestion was to use a credit insurer as collector, which is an independent activity and offered to uninsured companies. Credit insurers such as Atradius, Coface and Euler are very good at collecting, all have huge databases, they know what is going on in the market (overdue declarations from clients) and if they refuse to insure a business its creditworthiness / reputation in the market will tank.

The threat of getting one of them on the case cited by dbran could well trigger an offer of payment/settlement. Even if it did not, it would screw the bad debtor in his new business as all insurers link companies connected by shareholding/common directors.

Over the years many businesses have been driven under by the market becoming aware that insurers had pulled credit insurance cover. It is widely rumoured that Sears is having supply difficulties as a result of credit insurers reducing their exposure..

pedronomix

It would have been more obvious if you had advised dbran to use the Debt Collection Services of the firms that offer Credit Insurance cover. Some of the most active trade credit insurance providers/brokers in the Irish market do not offer debt collection services here.