My customer isn’t paying me, what can I do?

If you think you have exhausted all normal credit control procedures, you have stopped supplying your customer and your debt is not being repaid, what are your options?

Essentially, you may have no choice but to commence legal action. If the debt is due and payable, you can either seek a County Court Judgement (if the debt is disputed or as the first step before instructing a Bailiff to recover goods) or issue a petition for a compulsory liquidation of the company (a winding-up petition). If you are owed money by a company, there is no need to issue a Statutory Demand for payment; if you are owed money by an individual, you need to go through the process of issuing a Statutory Demand or a letter before action before proceeding to a CCJ or to a bankruptcy petition. Further information on our Escalate Dispute Resolution service, which is a fully-funded and risk-free negotiation/litigation service, can be found here. 

However, in the first instance, you might prefer to see if you can get your customer to agree to talk to us. We can (at the very least) then advise you if it is worth taking any further action. Perhaps your customer will accept that their business is insolvent and will take steps to commence a Liquidation or Administration. These are appointments we can take so, whilst we have to act in the interests of creditors as a whole and cannot be partisan in favouring you ahead of other creditors, you will at least know that your customer is taking proper advice and the prospects of a recovery of some of your debt are being maximised. There may also be other options which they should consider, such as a Company Voluntary Arrangement, which would ensure that not only do you recover on your debt, but you also retain a customer and its business going forward should you wish.

You should also make sure that your retention of title clauses are effective and can be relied upon, where stock is supplied. Visit your customer and have a look round, if you can. See how busy they are. See if your stock is on site. If they have got your stock they cannot sell, but which you can sell to other customers, take it back, issue a credit note and supply stock that they can sell, preferably on a pro-forma basis.