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DEBT RECOVERY

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DEBT RECOVERY Powered By Docstoc
					DEBT
RECOVERY
IN THIS ISSUE:

COLLECT YOUR
OUTSTANDING DEBTS FOR                                                            MOST COMMONLY USED EXCUSES
AS LITTLE AS £2                                                                  FOR NOT PAYING BILLS
                                                                                 Depending on your sense of humour, this article will leave you
TOP EXCUSES FOR NOT                                                              nodding in despair or laughing out loud in acknowledgement that
                                                                                 the excuse was not invented solely for your company and you
PAYING BILLS                                                                     shouldn’t take it personally.

                                                                                 Common and bizarre reasons given by businesses for not paying their
PRE-PACKS: WHAT DO                                                               invoices are listed as follows.

PRE-PACKS MEAN TO                                                                1)  I was struck by lightning and I’m unable to work
CREDITORS?                                                                       2)  All names are put in a hat; if yours is pulled out you will get paid. If
                                                                                     not, it will stay in that hat until next week
                                                                                 3) We’re filing for bankruptcy
                                                                                 4) We’ve moved address and lost the cheque book
COLLECT YOUR OUTSTANDING                                                         5) The cheque is in the post
                                                                                 6) The cheque book has been destroyed in the flood
DEBTS FOR AS LITTLE AS £2                                                        7) We’re waiting for our customers to pay
                                                                                 8) We can’t pay, we’re in the middle of an audit
                        Client feedback suggests the major concern               9) We’ve paid it
                        of business owners and finance directors                  10) We didn’t receive the bill
                        is getting paid on time for the work their               11) The computer is down
                        company has done.                                        12) I don’t accept handwritten invoices, only computerised versions

                      In the current environment we all face risks that          Equally, if you operate in business to consumer markets you may have
                      companies or individuals go bust owing us money.           heard some of these excuses:
                      We have seen a number of household brands
                      go into liquidation over the last year leaving their       I can’t pay the money I owe you as I need to pay my; mobile phone bill,
                      suppliers out of pocket, including legendary brand         gym membership, sky sports, children’s pocket money, stabling for the
Woolworths and MFI. Insolvency Practitioners are predicting there will be        horses, charity donations, yoga classes or children’s private school fees.
many more companies going into administration before this recession is           As lifestyles have changed in the good times, people now often regard
completely behind us.                                                            some luxuries as necessities that they simply cannot do without.

Trying to collect outstanding bills from customers can be testing. It is often   Whatever the amount of the money owed to you whether it is a business
a drain on your time and that of your staff, repeatedly issuing copies of        or a consumer you are dealing with, whether it is a one off bill or many
the same invoices, and making follow up phone calls.                             bills, we are able to help you recover your money fast. Don’t despair any
                                                                                 more and don’t waste any more of your precious time listening to excuse
Clough & Willis Debt Recovery department has responded to the                    after excuse. You concentrate on getting on with running your business
feedback from clients and are now offering to collect outstanding debts          and dealing with new work, and we’ll put our debt recovery specialists on
for as little as £2. The team can recover debts from across the UK               the job.
including Northern Ireland and Scotland.

The team consists of specialists who work on debt recovery work day in
day out and work in a professional, fast and efficient manner. Normally,
receiving a letter from a solicitors firm is enough to make most companies
pay up and treat your invoice as a priority rather than shuffling it back to
the bottom of the pile. What’s more, you don’t have to risk tarnishing your
brand by associating your company with a collections agent who may use
heavy handed and intimidating tactics.

For an initial discussion, please contact Jo Singleton,
0161 764 5266, or e-mail joanne.singleton@clough-willis.co.uk
                                                                                                                                                     ISSUE 19
PRE-PACKS: WHAT DO PRE-PACKS
MEAN TO CREDITORS?
Articles on pre-packs have become a common theme in business
magazines over the last year. A pre-pack is where the deal is made
to sell the assets of a failed company prior to insolvency and then
completed immediately after the appointment of administrators or
receivers.


Pre-packs are generally used in connection with administrations rather
than liquidations. If a company is being compulsory wound up as a result
of a Petition being presented by a creditor, then a company is not free
to dispose of its assets without obtaining permission from the Court.
Pre-packs enable the whole or part of the business and assets of a
limited company to be sold on, notwithstanding the fact that the original
company is insolvent and is unable to carry on business. Sometimes, a
pre-pack will be a streamlined version of the original company and may or     At their best, pre-packs can save the profitable bits of a business,
may not take on existing employees.                                           allowing it to carry on trading and save jobs. At worst, they allow
                                                                              directors to run up debts with impunity and set up in business all over
In cases where employees’ jobs are saved, there are clearly benefits to        again. However, directors should be aware that their conduct may be
the workforce as well as the purchaser.                                       investigated by the Department for Business, Innovation and Skills and
                                                                              they may face disqualification proceedings if there is a suggestion that
The strongest critic of pre-packs are usually the creditors and, in           they have allowed the company to carry on trading when it was insolvent
particular, trade suppliers who often feel that they have been left high      or deliberately run up debt.
and dry and that the directors and / or new business should not be able
to carry on whilst their debts remain unpaid. Creditors need to recognise     Pre-packs are an important part of the corporate rescue culture and whilst
that this is the risk of dealing with a limited company which has its own     creditors may not like them, it is important that they should realise that
separate legal personality from the directors and if the company has          not every company which becomes insolvent does so through neglect or
insufficient funds to pay the creditors the directors are not generally        deliberate intent of the directors. In many instances, a company can be
responsible for the company’s debts unless they have a Personal               pushed into insolvency simply because several of its customers become
Guarantee.                                                                    insolvent and do not pay them- the domino effect. The pre-pack exists to
                                                                              allow what might be an otherwise profitable business to carry on trading
In some instances, the purchasers of a pre-pack, whether they be              and hopefully to save jobs, which is surely in everyone’s interests.
outsiders or directors of the old company, will still need to purchase
goods and materials from a previous supplier and will try to continue the                                     For further information on Pre-packs, advice
business relationship. Whilst creditors may be bitter about dealing with                                      on unpaid debts owed to you, or advice on
people who owe them money, it may still be preferable to deal with the                                        minimising your companies exposure to high
new company and have ongoing business than to lose that business                                              levels of unpaid debt, contact
completely. Creditors are well advised to limit the amount of any credit
facility, perhaps only deal on a pro-forma basis and try if possible to get                                   Fiona Gaskell on 0161 764 5266 or
Personal Guarantees from directors.                                                                           e-mail fiona.gaskell@clough-willis.co.uk




                                                                                      Head Office                                    Specialist Family Law Office
                                                                                      2 Manchester Road,                            Knowsley House,
                                                                                      Bury, Lancashire,                             33 Knowsley Street,
                                                                                      BL9 0DT.                                      Bury, Lancashire,
                                                                                      T: 0161 764 5266                              BL9 0ST.
                                                                                      F: 0161 797 6157                              T: 0161 761 4730




                                                                              This newsletter contains general information. It is not, and should not be seen as a substitute for
                                                                              legal advice regarding any particular issue.
                                                                              Regulated by the Solicitors Regulation Authority. SRA number 60325

				
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