I need help with taking someone to the small claims court!

[Puffykins]

I'm owed £2500 by a company I have worked for. I have served them the letter saying that unless it is paid by x date, I will have to take legal proceedings. The man who owns the company finally replied to me, on Facebook (?!) saying that they were probably going to liquidate the company as it's not making any money, but it wouldn't be by the date I had specified needing to be paid by in my letter, so could I please be patient?

I responded asking for confirmation that I would be paid once the company is liquidated (it's an online shop) - and got no response.

Am I able to start legal proceedings? And would I be paid if the company, apparently, has no money?

He, personally, the owner, certainly has the money - and several houses, and is forever jetting between them throwing parties (thank you social media.)

The back story is I have been owed that amount of money for nearly three years now. Initially the owner was super nice, took me for coffee, explained the cash flow issue - I, to be nice (and we have friends in common) said of course, I could wait. In the interim one of my children was diagnosed with cancer, which he knows, making it very hard for me to work to the same extent I had been before - the upshot being that I would really like to be paid now. It's a month's income, and I'm not prepared to write it off. Plus, my work is still on his website, unpaid for. And it's just making me cross, and I want to stop having to send my unpaid invoices every 6 months and never getting any answer.

Is there anybody who knows my legal position? I don't have a contract for the work that I did, though I do have emails from him saying that he can't afford to pay my invoices yet, which I assume work as proof of the work having been commissioned?

And thank you!

Is he a sole trader?

If not, and it doesn't sound like he is from what you've said, your claim is against his company and not him so his personal wealth isn't relevant, sadly.

If he is liquidating the company, that usually means they can't afford to pay all their debts - so a liquidator takes over and you can apply for a 'share' of whatever assets they do have. It's quite common to get nothing at all from that, once preferential creditors have been paid - those are debts to people employed by the company (it sounds like you were freelance?), and money owed to the Government for PAYE or GST etc.

You can try and get small claims court action taken before it liquidates, but again if there is no assets, you might get nothing back even if you win. There's not much that you can threaten a company with if they are already planning to liquidate and close.

In short, I very much doubt that you'll get anything back now, it sounds like he's royally strung you along for three years and your time to take action may have been three months after the money was originally owed when they may have had more assets for you to go after. You can start a money claim online and submit all the evidence that you have, but it might cost you £105 and you may very well get nothing back even if you win. You'll have to weigh up whether it's worth that.

From experience, I'd collect evidence of everything including why you've waited three years to chase and only sent reminders every 6 months. I'd imagine he'll argue that you were both treating it as a low-priority debt (if he responds at all).

It does suck, I'm sorry. I have learnt to be utterly ruthless with invoices or you get screwed.

Yes he owes you the money.

Is the company a limited company or him as a sole trader or partnership. If it is a limited company and if it has no money even if you get a judgment you are unlikely to recover the money or to be able to enforce the judgment.

However if he is a sole trader and has the other assets you describe then there is a good change of recovery.

Check the status of the company/firm/entity that you di the work for first.

Thank you Anchor.

He's not a sole trader.

Firstly he put me off by a year so I didn't chase, then my son got cancer so I basically lived in hospital for a year (during which time he paid one of the invoices - the original amount owing was £3000).

Then I started chasing again.

Bearing in mind what you've said, I'll debate whether or not to pursue. I guess it's a valuable lesson learned. I'm just irritated that I was so trusting.

I'm so sorry . The cynic in me thinks he's done this on purpose, especially telling you that the company would be liquidated. It could be worth seeing if they've filed accounts on companies house? That would show you if there's much assets/profit, I'd expect there to be a lot more liabilities than income if they are liquidating.

It sounds like a tough few years, I hope your son is alright.

Thank you so much Anchor. We've got another year a half of chemo, but it's maintenance now, so much less intensive, and he's doing well. So that's good.

I found the accounts with Companies House, as you suggested. Net Liabilities and Shareholders Funds are both listed as being £31,409 - and I'm not 100% sure what that means . . .