We pride ourselves on negotiating well to recover debts on behalf of our clients with even the trickiest of customers.
We are firm but sympathetic as that’s usually the best tactic to get results.
Yet with the best will in the world, there are some who delay, prevaricate, procrastinate or just stubbornly refuse to cooperate. And in such cases, it takes drastic action.
This can mean going to court, though court action can take up to six weeks to play out. But there is another measure which we can invoke which can have speedier results: a statutory demand.
Winding up petition
A statutory demand means that the company has to pay its outstanding debt in 21 days – if not, we petition to wind them up, so the individual responsible is declared bankrupt.
It can be especially useful in a situation where we know that there are other creditors: issuing a statutory demand means we would be at the top of the list, should the company cease to trade.
We used a statutory demand recently in a case where the we knew the company concerned had cash flow problems but, with contracts in the pipeline, was probably still viable. They owed our client around £15,000 and they owed money elsewhere.
Interest and costs
Issuing a statutory demand was a way of ‘shouting loudest’ – drawing attention to our claim and focusing the company’s mind on paying our client first.
It worked and we recovered the £15,000 plus interest and costs.
A statutory demand is not appropriate in every case but it can sometimes, as they say, unblock the parts of the payment pipeline that other measures don’t reach.