Small claims advice

[Lovingit81]

I'm considering taking a person who was trading as a business to a small claims court. Cut a long story short they seemed very professional, great website, lots of positive reviews. They took my money for an event and never turned up. Nearly £1k. They have now told me to basically sod off- and that's me saying it politely!!

My question is if I win (which I no doubt would as I have plenty of evidence and paper trail) what if they don't have he money to pay. Is that it?? Advice on the internet seems to imply if they don't have the money there is no point in taking them to court. Surely once they have a writ against them I would get my money back? Can they not issue an order to withdraw funds from any earnings?

Thanks for any advice.

I have won almost £5k in the small claims court. He didn't pay up so I contacted bailiffs to enforce the judgement. He tried lying to them but I had proof of his lies and the next day they visited him and got the first installment. Took about £500 from him a fortnight and I got all my money back (including bailiffs fees and interest at 8% since the judgement).

The court cannot make him pay money he doesn't have. It may be that the court will agree to him paying in instalments. If he doesn't pay you will need to take action to enforce the order, which costs more, although you will be able to add those costs to the amount he owes you. If he is unemployed or bankrupt it is unlikely you will get your money back.

Around 1 in 4 people who get judgements from the small claims court only receive part of the payment they were awarded and around 6% never receive anything.

Also, if he is trading through a limited company, he is not personally liable for the debt. You would sue the company rather than him, with the risk that he will close down the company leaving you with nothing.

So it is not certain you will get your money back even if you win. If he is obstinate you may have to spend more money on enforcement before you get anything back. But you definitely won't get anything back if you don't go to court.

If you do decide to go ahead, the first step is to send him a "letter before action". Basically this is a letter setting out what he owes you, giving him a reasonable amount of time to pay and saying that you will take legal action if he does not pay by the deadline. This may be enough to persuade him to pay. Equally, receiving court papers may be enough to persuade him to pay as he will realise you are serious.

They pay by instalments, attachment of earnings, or you get the bailiffs in. If they've got no job and no assets, then you're out of luck!

Thanks for all of your advice. It all seems so unfair. I have a sneaky suspicion he won't have many assets. If he is unemployed can the charge not sit on file and wait until he is employed?

Once you have a CCJ (which is what you get from small claims) there is no time limit on enforcement so you can wait until he is employed or has assets. However, if he goes bankrupt while you are waiting the CCJ will be part of his bankruptcy. In that situation the best you can hope for is to receive a portion of what he owes.

Of course, if he has the money or assets to pay you now none of this is an issue.

Were they trading as a company or sole trader? If the former, then in my experience most directors simply wind up the company and then set up a new one, thus avoiding any enforcement, unless bailiffs can seize assets before any winding up (assuming there is anything worth seizing).

If a sole trader, then if he has no assets himself (does he own property? If so, you can get a charge over that), then it's not really worth pursuing. A judgment is a piece of paper. You need something to enforce against.

There is a time limit of sorts on a CCJ. Although the Limitation Act does not apply to CCJs permission of the court would be needed to enforce one over 6 years old.

Was it a limited company?

As said above the first question is was it a limited company or sole trader. His paperwork might make that clear.