Stressed over unpaid invoice - should I go to small claims?

[stressedout85]

I’m freelance and really in need of some advice.

Last year I completed a small job for a client for the agreed sum of £300. I invoiced them and after 40 days (my payment terms are 30 days) I chased the payment as nothing had come into my account. They emailed back apologising and said they’d pay soon, but nothing materialised.

Anyway, several emails later I’ve still received nothing and the invoice is now about 70 days overdue.

Earlier this week I sent another email stating that if I don’t receive payment by the end of the week, I will add a £40 admin fee plus backdated interest - as per the government guidelines - to the invoice.

I’d hoped this would induce a response but it’s now Thursday and I’ve still heard nothing. Obviously there’s a chance they could still pay up as I did say end of the week, but I’m getting the feeling that they won’t.

Once I’ve reissued the invoice with the admin fee plus interest, what are my next steps? How long do I give them to pay the new invoice before going to small claims and if I do go to court, can it be done online or will I need to appear in person? If they still fail to pay after the court rules against them, what happens next?

I’m really stressed out about this as money is tight at the moment and I have a baby on the way so don’t want to let this slide.

The person owing is a sole trader, not a company, in case that’s relevant.

Any advice would be much appreciated.

When I had that problem, I went to a debt collection agency. They added fees and chased it up, and I got my money less a percentage.

No hassle.

I chose that method as I didn't have to do the work and they knew all the legal stuff. And I only paid if they got the money.

Might be an option?

Unless you really want this client's custom again - and why would you? - you don't wait at all. You include a "letter before action" with the revised invoice, telling them that you'll go to court if payment not received in 14 days, and then file as soon as that deadline expires.

If they don't pay after the court orders them to, you'll be able to apply for enforcement of the judgment, typically meaning bailiffs seizing assets.

OP it’ll be worth using a debt collection agency. I think I used my credit controller in these circumstances (similar debt too) and they were fab!

Thanks Jeezy. I’ve no experience with debt collection agencies - what can they do that I haven’t tried already to get people to pay?

Thanks @ThePants999. No, I definitely don’t want to work with them again!

How easy is it to sort the letter before action and court stuff myself? It’s a very simple case, but I’ve never done anything like this before.

I'm not best placed to answer that. Speak to a debt collection agency and ask their advice. It's been a few years since I used one.

For me, using one was great as my time was better spent elsewhere. I would have had to spend quite a lot of time on researching what they already know, and for the sake of 10 or 15% I think their fee was, it made financial sense to pass it on to them.

This sort of thing really makes me angry - especially when it's a large business refusing to pay a small business - or they have ridiculous payment terms, I was looking at a contract a few weeks ago where they said they'd pay 60 days after they received the invoice. So cheeky. Standard is 30 days and there's really no need for it be more than 14 if they have the correct PO number etc.

This may help, OP: www.smallbusinesscommissioner.gov.uk/deal-with-an-unpaid-invoice/get-advice/

People find it harder to ignore a debt collection agency, they take it more seriously than an individual chasing a debt.

Pick up the phone & ring them. Give that invoice a human voice. Make them feel guilty.

Keep ringing, make a nuisance of yourself. After 3 days, if they haven’t paid, tell them you will hand it to a payments agency.

I've never had a client not pay eventually, thank goodness, but I have these solicitors bookmarked (someone I know used them and got their money bacs that same week) in case it ever comes to that, they charge £10 plus vat to send a letter threatening court action and its all done online, they are apparently very successful and most pay up before their next stage-
here

Is it a private client I.e. individual or v small company or large organisation?

Thanks @VeganCow. They have quite bad reviews online, although looking at it, most of the reviews seem to be from people on the receiving end of their letters, so maybe that's a good sign!

@theworldisfulloffgs it's an individual.

This sort of thing really makes me angry

Me too - it wastes a huge amount of other people's time and is so unfair.

I send an invoice, statement after 30 days, then a few phone calls to see if there is an issue, then a 7 day letter then small claims court. That way I have covered everything and gave them enough chances to pay so they cannot argue with the claim. I have had to issue a few ccj's but they have paid just not in enough time to remove the judgement. It's not nice but it has to be done sometimes. Good luck.

Yes disgruntled people having received one of their letters. Your client knows full well what their debt is, so you should get your money.

Why wouldn't you use the small claims court?

I used to teach English to some General Electric employees in Spain, paid for by the employer. They didn't pay their last invoice before I came home to the UK, so I took GE to the small claims court and the paid straightaway, including interest and the court fee.

Why wouldn't you use the small claims court?

I've never done it before and have no idea how to use it or how difficult it is - I was hoping for some advice on whether it can all be done online, whether I'll need to show up in person etc.

Try on the legal board as I’m sure you will get advice there

The thing is with small claims, is you have to use mediation beforehand to try to come to an agreement and after, even if the debt is ordered, you still need it to be paid. It’ll end up costing a fortune- at least try the debt collection agency first. They usually only charge if successful

Unless things have changed - small claims can be started online but may end up in a hearing. One thing I didn’t realise is the other party can ask to have the case heard locally to them. If you win you can Claim expenses but even then actually getting the cash can be tricky

The thing is with small claims, is you have to use mediation beforehand to try to come to an agreement and after, even if the debt is ordered, you still need it to be paid. It’ll end up costing a fortune- at least try the debt collection agency first. They usually only charge if successful

As others have said, maybe try the legal board - you might get better advice than this.

Thanks - I've asked @MNHQ to move this thread to the legal board.

We're just moving this thread over to legal for the OP.

I think you need to ring up and speak to them. And keep ringing. Emails will get ignored.

My experience is that companies will hold out as long as they can and pay by their payment terms rather than the supplier's. What are their standard payment terms? I know some companies that are 90 days.

They will give in if you annoy them enough without resorting to small claims.