22:49
Faizan
It would appear that some rogue 'Debt Recovery' merchants might be doing the rounds again. Having spoken to a few UK based printers, some of who appear to have fallen foul of them recently, it felt like a good time to cover the subject.
For those of you who haven't encountered such schemes before, they guarantee that they can collect debts from companies that have gone out of business, in some instances several years ago. Their offering can be attractive to the unaware or reckless creditor who has lost a relatively large sum of money...
Always ready to stand corrected, we would be delighted to hear from anyone who has benefited from such a scenario, where full recovery has been made from the directors of a company in Liquidation, and it didn't cost a penny!
They may quote section 214 of the Insolvency Act, which deals with Wrongful Trading and which states that any director of a company that allows that company to continue trading whilst knowing that it is insolvent may be guilty of wrongful trading. Furthermore, that such a director could be held liable for the debts incurred by that company during the period of wrongful trading.
They may seek to convince you that no director can possibly be unaware of the state of their business prior to calling a Meeting of Creditors - or even to the appointment of a Receiver or Administrator - and therefore that they can be accused of wrongful trading and made personally to pay the debt due to you.
Most likely, they will have stumbled across your name on a creditors' list of a failed company and will know that you have been hit. They will make an educated guess from the size of your business in relation to your loss how serious the situation is for you.
You will almost certainly be asked to pay a deposit 'against Court Costs' and we have heard of figures of between £600 and £2,500 - although larger sums aren't unheard of.
This is where the Guarantee comes in - and goes out! You will be asked to sign a contract instructing them to act on your behalf. This contract guarantees your deposit back but only provided that you allow them to 'exhaust every avenue' to collect the debt.
Subsequently you may receive frequent demands for payments for this charge and that cost (one wonders where the deposit is!) and this could continue until you cry 'enough'!
It is at this point that they could get obstreperous! They will tell you that you cannot have your deposit back because you have not let them 'exhaust all opportunities and avenues' for the recovery of your debt.
For those of you who haven't encountered such schemes before, they guarantee that they can collect debts from companies that have gone out of business, in some instances several years ago. Their offering can be attractive to the unaware or reckless creditor who has lost a relatively large sum of money...
Always ready to stand corrected, we would be delighted to hear from anyone who has benefited from such a scenario, where full recovery has been made from the directors of a company in Liquidation, and it didn't cost a penny!
They may quote section 214 of the Insolvency Act, which deals with Wrongful Trading and which states that any director of a company that allows that company to continue trading whilst knowing that it is insolvent may be guilty of wrongful trading. Furthermore, that such a director could be held liable for the debts incurred by that company during the period of wrongful trading.
They may seek to convince you that no director can possibly be unaware of the state of their business prior to calling a Meeting of Creditors - or even to the appointment of a Receiver or Administrator - and therefore that they can be accused of wrongful trading and made personally to pay the debt due to you.
Most likely, they will have stumbled across your name on a creditors' list of a failed company and will know that you have been hit. They will make an educated guess from the size of your business in relation to your loss how serious the situation is for you.
You will almost certainly be asked to pay a deposit 'against Court Costs' and we have heard of figures of between £600 and £2,500 - although larger sums aren't unheard of.
This is where the Guarantee comes in - and goes out! You will be asked to sign a contract instructing them to act on your behalf. This contract guarantees your deposit back but only provided that you allow them to 'exhaust every avenue' to collect the debt.
Subsequently you may receive frequent demands for payments for this charge and that cost (one wonders where the deposit is!) and this could continue until you cry 'enough'!
It is at this point that they could get obstreperous! They will tell you that you cannot have your deposit back because you have not let them 'exhaust all opportunities and avenues' for the recovery of your debt.
Posted in: business
