We have a client that we dealt with in the past, who recommended us to several people etc. He needed a product desperately and we advised him of the high costs of importing and he said "go ahead". We invoiced the client and, now, two months later, he says he will not pay. He claims to be going bankrupt. He claims that he will become a limited company in a couple months and not pay any of his personal debts. He claims that he will not have to pay us a penny if it goes to court. He owes us £700 at the moment. He has recently updated his website and appeared on television promoting his business. Has anyone had a similar experience? What should we do?
Small Claims Court. Now. Before he goes Ltd. He will be given a timescale by the court - and he will have to pay the court fees (which are quite small).
This procedure should take less than two months to get payment.
(Oh and by the way - try and get it in writing that he will not pay because he is going Ltd. When he goes bankrupt you can prove that he has deliberately been financially negligent. This means his bankrupcy takes 15 years instead of 12 months to complete.)
Take the amount on a credit card today, you might be able to use paypal in UK -don't know. If person is US citizen find out what land, building, car person owns file Lien against the property immediately.
I have been there - and it is a major stress, as you know the client is trying to get away with something. Turn this over to your attorney with the instructions of "squeeze" and they will feel the pain and pay.
>>He claims that he will become a limited company in a couple months and not pay any of his personal debts
If he switches his business to an LTD company that does not absolve him of his personal debts. If he goes bankrupt in his personal name then as far as I know he cannot start a LTD company or be a director in one.
Bait him. Get him to accept in writing that he owes you money and that you can jolly well sod off. Then file your claim in the Small Claims Court. But, be warned, the small claims courts are full of officious, pompous sh*theads. If you don't attend the hearing they'll take it as a personal insult and may rule against you just because you didn't drop everything in the world to make a 5000 mile journey to attend their hearing.
If you appoint a solicitor to attend the hearing for you and you win the case he will have to pay or have a CCJ registered against him. This will make it difficult to impossible for him to get credit anywhere.