Small Business Debt Advice - Court papers received today

[adridude]

Hi There,

 

Mid last year I opened up a business for myself which was initially running well. Towards the end of the year business began to ebb off, and it couldn't have chosen a worse time to do it.

 

I had just bought some new office equipment from one of my suppliers which included mainly computer components. This delved the company into £3000 credit (incl VAT).

 

Due to the company being high and dry when it comes to cash flow, I am unable to pay the supplier off in full as I had hoped.

 

They are now requesting that I pay them off at a rate of £1000 per month over 3 months until it is paid off.

 

I have put some old stock on the auctions which should cover about £1000 of it, but I was wondering what I can do to come to a slightly more amicable payment arrangement.

 

Obviously, the money paying this off will have to come from my own money (i.e. tax credits etc...) so the best I can offer is about £200 a month until business picks up.

 

This is the only debt that my business is in, everything else has been dealt with in cash..

 

Can someone give me some sound advice as to how I should approach this without jeopardising the health of my company? I'm extremely concerned that this companies legal department will take me to court, which in turn will render the company insolvent on such a small sum of money!

 

Thanks

 

Adrian

[gordies]

Are you a Ltd company or sole trader?

[adridude]

LLC. I do realise that I am at arms length from the debt, but this is NOT what I'm trying to achieve. I'm trying to keep my company somewhat afloat, as well as alive.. Are there any forms of debt payment plans or something like that which can assist here?

[cerberusalert]

Have you tried to negotiate lower payment terms with the supplier?

 

Unfortunately a lot of businesses are in the same boat which has a knock-on affect to the suppliers alike and they may be more amicable rather than taking the route of legal action/ repossessing the equipment.

[rebel11]

Hi ad

 

Have you contacted a Credit Union to see if they can loan you some monies.

 

http://www.abcul.org/media-and-research/news/view/208

http://www.abcul.org/credit-unions/borrowing-from-a-credit-union

http://www.findyourcreditunion.co.uk/home

[adridude]

I'm negotiating with them now and have shown them I am willing to work with them by offering a token payment of £200 a month (which is all I can afford). As of yet there is no answer, so I'll wait on that and pay them regardless.

 

Furthermore, what is a credit union? I've never had dealing with these before, nor have I ever heard of them.

 

Hmmm in regards to creditunions, I need to have an income of over £16k a year before I can apply for the £3k which I need. Unfortunately my income varies depending on the state of the company etc... and my bank records reflect this too. So I guess that isn't an option.

 

Any other advice as I've made an offer of £50 a week as a token payment until business picks up, but I haven't heard from them. I'm not sure if I'll hear from my account manager or the legal department.

 

I'd like to have a little advice under my arm as to how to approach this without being liquidated over a mere 3k!

[Lea_HTH]

They're not likely to liquidate you for 3k.

 

Make sure that any offer you make is actually paid - lack of payment tends to be the reason for further action being taken.

[adridude]

Yeah,

 

I've made several offers, and never have had one acceptance of an offer. Instead I get threats of legal action.

 

Despite contactign them regularly, they chucked it over to a law firm by the looks of things :-/

 

Could they liquidate me for this? If so I'd best crack on and open up another company to shift business there!

[adridude]

Hi,

 

Well I've got the CCJ papers today, and the service date is TOMORROW, is that normal? Furthermore, ther eis no way on earth that I can pay off this CCS (3.6k) so I've decided to wind the company down.

 

The issue i have is all of the forms seem to be for am Individual as opposed to a LLC. How am I supposed to Admit that I owe the money when it is the companies owings?

 

Can someone advise me here? The forms I'm referring to are the N9A forms. I'm certainly not going to admit personal liability on a business debt! Furthermore, I thought that libility was limited with shares? In my case £2 of it.

 

Thanks

 

Adrian

[cerberusalert]

Thread moved into the legal Forum.

[adridude]

Thanks,

 

I've never been to court for a debt this big before and am worried as heck!

 

From April 12th last year, the company has NOT done well at all. It was my first company ever, and I bought some basic office equipment and stock which summed up to £2400 (Roughly 3k with VAT). Over the years, the company struggled, yet I was still finding for office stationary etc... out of my own pocket.

 

Recently in light of what was happening to the company, I've decided to close it down (ease trading).

 

The bank is about to close my accounts, the final VAT return has been done, and that stock, which I bought, alot of it was deemed faulty. Furthermore, due to a breakin, some of the equipment was stolen month ago and I'm at a loss as to what to do.

 

I haven't even drawn money form the company myself, I've literally paid for everything out of my own pocket. The only thing I did do at the beginning of this year was sell myself a laptop to dover the directors loan. I did this as the computer I was using to do business on, my personal computer, blew up.

 

I stayed in excellent comms with the creditor (see above), and have even offered to return the goods (last year) to which I never had a definite answer. I also offered to make token payments on the account whilst I sought other funding.

 

Can someone help me as to what to expect? I'm definately not in any financial shape to pay this off, both the company and Myself as the director (LLC).

 

I do ideally want to wind the company down as interest is building up and I don't want any more debt.

 

I called a few insolvency practitioners to see if they could help me, but they said that the liquidation/insolvency process costs MORE than the £3000 debt. I was advised, informally, to go to court and have y say (which isnt possible as I was told WAY too late about court), and let the creditor wind the company up for me.

 

Is this wise? Reason I ask is because I've opened up another LTD company, which will be finded entirely out of my own pocket, no credit etc... I've made this clear to the bank etc.... Will this affect the second company?

[cerberusalert]

I've updated your thread title to reflect the urgency and asked for help in the mods forum.

[adridude]

Thanks bud.. Nothing like waking up at 5am on the court day with your heart in your throat! lol

[adridude]

...Just to add, looking at various sites on the internet, I have 14 days from the 'Date of Service' (a stamp on the claim form with todays date on it, reading Date of Service) i.e. today, to respond. Is this correct? I think I misunderstood into understanding that I had to be in court by today?

[cerberusalert]

Yes you have 14 days to respond.

 

So they have marked the papers as served today giving you the 14 days from now?

 

Quoted from andyorch

Suing a limited company, list its full name and address. A limited company is considered a person. This means that you can sue and enforce a judgment against a company. The Claimant must not sue the owners of the limited company or its managing director individually unless you have a personal claim against them that is separate from their role as part of the limited company.

 

Most of the time people who own or operate a limited company are not liable for its corporate debts. This is known as limited liability and is what makes forming a limited company so important.

 

When dealing with a limited company (also known as a limited liability company) the party suing will rarely, if ever, be able to make claims to anything but the company’s funds, assets, etc. Though creating this type of business is more cumbersome as more paperwork is needed—and company operations records are in the public domain, another major difference—it is nonetheless a highly popular business structure to choose due to this legal shield.

 

Hence the Summons is in the Proprietors name a big no no!!!!

[adridude]

Yeah, on the actual claim form, there's a dated rubber stamp which reads:

 

DATE OF SERVICE

04 Sep 2012

 

Because it's my first time, I thought that was a date I had to show up in court lol...

 

*edit* Ah phew... Just read the except from your post.. THanks for that, I thought that eventually it would come down to me, hence the sheer panic! I have acted as a responsible director and offered a repayment plan, which they never accepted, also on top of that, I offered to return the goods, which they also never accepted and finally I have shown good communication with them. I think the ultimate outcome is that a judge could slap a winding up order on the company then (or am I wrong)? I would have thought if this was done that the creditor in question would be liable for the initialinsolvency practitioner fees, which I believe grossly outweighs £3000 (inc VAT)

 

Finally, I've noted that they've charge me interest on the GROSS figure, not the net figure. Is this correct?