If the client still doesn’t pay the amount they owe, it’s probably time to take legal action. But, the good news is that; small businesses do not need to get a lawyer at this time.
The UK law allows anyone who is owed money to make a statutory demand for it, but this must be done before the debt exceeds six months, and it must be done in person.
Once the client is served with a statutory demand, they are required to either pay the overdue amount in the next 21 days or come up with an agreement on how the money will be paid.
What happens next?
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.