Court threats and solicitors letters for £650 up to £850

[shorthorse9]

Hi all, ill keep this as short and straight forward as I can.

I recently started a cleaning company (June 2012).
I looked online for contract tender leads in July/August time.
I signed up for one online to have a look about. It was all big £m contracts that I could not manage right now so I ignored all the sales/spam emails i got.
In October last year I got an invoice for £985 for the years subscription - I didnt cancel prior to the free months service!!! I ddnt realise I had to.
After hyperventilating I called the company to explain i'd made an awful mistake, carried on hyperventilating so they said call back when I was calm.
After speaking with several people and finaly the finance director, who said 'dont worry Im sure you wont have to pay £950' just put this all in a letter to me.
I wrote a polite and pleading letter to explain my circumstances - one man show currently, cant do big contracts, oversight on my part... etc etc.
They wrote back giving a discounted price of £650.
I called to ask why it was discounted, thanks but still dont have that kind of money! They said they had an offer on at the time of my signing up but didnt put the discount on the invoice. I said great but the FDirector said I wouldnt have to pay. All calls are recorded btw.
They said I was liable for the money and then totally dropped the nice act. Said they would take me to court etc etc.
I called my accountant who said to ignore them, change the registered address to his. I did so.
December I got a debt collectors notice, seeing as I had changed the address i scratched out the address and wrote 'NOT KNOWN AT THIS ADDRESS. RETURN TO SENDER'. Heard nothing then last week I got a solicitors letter saying they will take me to court for £850 plus all fee's and I should contact them within the next 7 days or they will start court proceedings.

The company is Limited. None of thier letters are addressed to '....cleaning limited' only the '.....cleaning' part of the name.
I dont have £850 anywhere!
Have not yet responded to the sols letter.
do not have any office/cleaning supplies at the house (where they have been sending letters to)
I dont own the house i live in but do own a property in Hove - can they touch that?

What are my options here?
What should I do? I dont want to shut the company down as its just got going and I would be unemployed.
Can they come after me personally (no PG signed)
Can it affect my personal credit rating if the company gets a CCJ or somesthing?
Whats the worst they can do?

[ploddertom]

Re: Court threats and solicitors letters for £650 up to £850

Does the letter you have say "may" or "will"? Which DCA wrote to you & which Solicitors? Chances are they are just trying it on.

[FlamingParrot]

Re: Court threats and solicitors letters for £650 up to £850

That's an old trick, unfortunately still very prevalent! Offering a free trial (usually 30 days) but you have to remember to cancel before the end of the period, otherwise it's assumed you wish to continue with your paid subscription. :mad2: :mad2: :mad2: This sort of thing should be outlawed but I can't see that happening anytime soon, not whilst we have a Capitalist Moron (CaMoron) in charge! :rant: :rant: In most cases, you are required to provide card details even when the trial is free, so they automatically start charging at the end of the trial period, unless you cancelled before. This case is slightly different in that they have invoiced you.

If it's a limited company and you signed up with the company name rather than your name, then it's not your debt, it's the company's. That's the whole point of it being LIMITED, you are not personally liable for the company's liabilities. Companies also have their own credit records separate from those of their directors. A limited company is a separate legal entity from its directors and/or shareholders and you can't get a CCJ for a company debt. The exception would be if you signed anything agreeing to a personal guarantee, which is common with business overdrafts and bank loans, but I doubt would have been the case here.

Whilst a creditor can't take you to court for a company debt, what they can do is apply for a wind up order, as long as the debt is over £750. Here is where the 'discount' can make all the difference: if you have it in writing that the alleged debt is just £650 then it would fall below the threshold, if it was £850 it would be above it. Having said that, it is very unlikely they will proceed even for that amount given the fees involved: a £220 court fee plus a £1,165 petition deposit. A wind up petition is the company equivalent of a bankruptcy petition for an individual and would force the company into liquidation, however, in this case I doubt the creditor would proceed due to the costs being higher than the amount they expect to recover, unless the company had assets that could be used to reimburse the creditors costs. See this --->
https://www.gov.uk/wind-up-a-company...money/overview

If your company was in a lot of debt it could apply for voluntary liquidation, in which case you'd close the company, however, this wouldn't stop you from setting up another one. A friend of mine liquidated his company in 2004 because he was being chased for a magazine advertising debt from 2001, yet he set up another company in 2005, which he liquidated in 2008 and set up another one that same year. My employers also liquidated their company in 2011 and carried on using another company one of their partners had, so if it came to that, it's not the end of the world. But that would really only apply if your business was in a lot more debt than that dodgy internet subscription.

[shorthorse9]

Re: Court threats and solicitors letters for £650 up to £850

Hey folks thanks for the advice here. Ive had a couple of letters through from them but nothing yet has materialised. Good to know all that info Flaming Parrot that has really set my mind at ease. I cant see them going all the way for £650. Ive spoen to my accountant again and he said to worry when the court summons comes!
Thanks again, Loving this site!

[CleverClogs]

Re: Court threats and solicitors letters for £650 up to £850

That's an old trick, unfortunately still very prevalent! Offering a free trial (usually 30 days) but you have to remember to cancel before the end of the period, otherwise it's assumed you wish to continue with your paid subscription. :mad2: :mad2: :mad2: This sort of thing should be outlawed

It should be easy to add a few words to the Inertia Selling section (link) of the Distance Selling Regulations 2000.

After all, Cameron has just won a vote giving gay couples the same right to bitter divorces as men and women.