Now, if the 21 days lapse and payment has still not been made, you have two options;
If the amount you are owed is less than £750, you are allowed to apply to wind up or bankrupt their company, although this has to happen within the next four months of the statutory demand.
If the amount is more than £5,000, you can submit a petition for bankruptcy with the courts.
It is wise, at this point, to bring in a third party to handle the issue for you, such as a third-party mediator, a solicitor, or another advisor.
Documentation Needed For Taking Legal Action
The first thing you must ensure is proof that you tried to resolve the problem before taking any legal action. If you have not done this, then the court may go against you.
It would be best if you had the following; Letters, emails, and any other recordings showing that you did try to either use mediation or negotiate with the client.
You can write the initial letter on your own, but it is always advisable to have your solicitor do it for you, as the client is most likely to respect that more.
The solicitor will also ensure that they include all of the information required for your specific situation for the court if you decide to go to court after all.
How to Make the Money Claim
You can make a claim in court for the amount of money you are owed. This is often referred to as “a small claim” or “a money claim.”
This amount can include any interest you have charged the client or compensation you are owed.
The customer may pay as soon as they receive your claim to avoid getting a court order against them. If they do, it will not cost you any more than the original fee, and you will not have to go to court.
If the money owed is a lot, then the situation may become complicated, and you are less likely to receive payment immediately. The claim may go to court if the customer continues to disagree with your claim. This is pretty expensive in the long run.
Find out how to make a claim and how much it costs in: