7 Useful Tips For When A Customer Goes Bust

Big or small, we could all face that sickening notion when one of our Customers gets pulled into some sort of insolvent triangle.

The kind that means you can’t get in to take out what you’re owed.

“I’ve gone bust”

“We’re shut, go away.”

“We have entered into liquidation/administration”

“We’re about to go bust, but are setting up a new company”

What do most creditors (companies that are owed the money) do?

Larger companies may likely just write the debt off.

Smaller companies may seek further advice from their accountant.

Below is a short guide to understanding the basics when faced with a Customer pulling the plug.

Confirm the date the company went bust

• Establish the date that the firm have been put into insolvency.
• Utilise one of the links below to establish their current financial position (and whether what they are claiming is correct)
• www.companieshouse.gov.ukhttps://www.insolvencydirect.bis.gov.uk/eiir/
• Ask your Customer to forward you paperwork concerning the insolvency claim.

Alternatively, if details are given, speak with the IP (Insolvency Practitioner) firm to clarify some of the following, subject to the circumstances of your debt owed:

1. If the firm has gone bust, are you on the list of creditors?
2. If your name is not on there, request for a Proof of Debt to be filled out (POD form).
3. Request to see the creditors list – note who the largest creditors are and what claims, if any, have been put in by all main shareholder, including any Directors.
4. Determine if your claim is big enough. 
5. If your claim is small, then it’s likely you will not get a payout and you will therefore need to determine whether or not it is viable to put in a claim.
6. Ask when there is going to be a Meeting of Creditors.
7. Remember to attach documentary evidence onto your claim as necessary.
8. If your terms and conditions allow, ensure that you make a Retention of Title Claim if you offer any goods of notable value.

Summary

By having the above as part processes in place, your Accounts Department can establish whether or not it’s cost effective to pursue the debt that is owed to you.

If you would like further information on this, and/or any other Recoveries issues then please do not hesitate to contact us.

Tel: (+44) 0208 088 4565

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