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One of the first major signs that your business finances are getting out of control is receiving notice that a creditor has begun an action against you in a county court.
You need to act quickly, both to minimise the damage to your credit rating and to assess what other financial problems may be facing your business.
It would be wise to seek professional advice, particularly if you dispute the claim or are unable to pay it for some reason.
Before they have resorted to legal action, your creditor will have sent you a final notice.
Having received notification of the court claim, you can choose to admit to owing the amount and make payment. This will cost you more than if you had paid the initial bill, as you will also have to settle the court fees and possibly pay interest.
If you pay up at this point, there will be no CCJ against you.
However, if you dispute some, or all, of the amount, or simply ignore or overlook the notification, the court will decide whether or not the money is owed.
If it is decided that you do owe money, your business will have a CCJ against it.
There are several good reasons for staying clear of a CCJ:
– it increases the cost of the debt, by adding court fees and interest.
– it alerts other creditors to your potential inability to pay their invoices, meaning they could launch their own actions.
– it has a negative impact on your firm’s credit rating, making it harder to borrow money.
– it raises the level of concern among your own staff, threatening their morale.
Threatened with court action to recover a debt which you don’t dispute, the best way to deal with it is usually to pay up.
If cash flow is your main problem, Business Recovery can help you find new forms of finance to boost your working capital. Our specialists work with a network of funders looking to put money into businesses in various different ways.
Hundreds of firms have already benefited from our experience and expertise in sourcing commercial finance.
If your business is fundamentally viable, but lack of cash is a big worry, give Business Recovery experts a call now for a free, no obligation consultation.