Debt recovery - distressed business -unequal treatment of creditors

Debt recovery - unequal treatment of creditors

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I have a situation where I am owed money (for a small one off project) by a client , which had very quickly descended on hard times following an unfortunate turn of events.  

Cutting a long story short, at this point in time, the business has ceased trading, although efforts will be made in due course to resume activity in the autumn - in the meantime the business appears to be using available resources to keep things ticking over (paying utlilities and business rates) and not paying old creditors.

My own take is that the efforts to revive the business may well not succeed and that the business model is not conducive to cash generation that will allow historic debt to be paid off even within a year.  I am uncomfortable that money that comes in from debtors is being used to pay off newer creditors in preference to myself and other older creditors.    

An initial call to a legal help line has indicated that 'wrongful trading' only applies to the new creditors.   In more than 10 years of business I haven't experienced a bad debt and I'd like to try and make sure that this is not my first!  Has anyone come across a similar situation or have any thoughts on this?


Replies (3)

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By cheekychappy
04th Jul 2016 14:17

Just put a claim in through money claim online.

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By pauljohnston
05th Jul 2016 15:18

Not sure how much you are owed but follow cheekychappy's advice although I recommend you sent a 7 day before action letter. After 7 working days start your court action

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Replying to pauljohnston:
By David_Lewis
05th Jul 2016 15:30

Thanks for the replies the amount is about £1,200 - (I'd charged a substantially reduced rate as it's a not for profit for organisation and I wanted to help them out!)

The not for profit status makes me slightly reluctant to go legal - although I guess it probably is the right course of action.

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