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Bankrupt client with more than one company
Thread poster: Gabriele Demuth

Gabriele Demuth  Identity Verified
United Kingdom
Local time: 10:16
Member (2014)
English to German
Nov 30, 2015

Hi all,

Last week I found out that one of my clients from Belgium has filed bankruptcy for one of their companies. I have outstanding invoices for the bankrupt company (200 Euro) and also for another company with a different name, but under the same address (500 Euro).

The employee I worked with let me kindly know about the bankruptcy when I sent a reminder for payment and that employees are also waiting for their wages, she also told me that the second company is not affected by the bankruptcy, that she has forwarded my invoices to the accountant and that they should be paid. Payment for the invoices of the bankrupt company would take time, but I would be paid.

Now I am worried as that particular employee was always the one who got things done and pushed for invoices being paid, some of these invoices are already overdue and have been with the accountant for over one month. However, that employee does not seem to be at work anymore and no-one else does contact me, I tried telephoning but there is just a message.

I am not quite sure how to proceed now, in terms of the invoices that are meant to be paid, somehow I think it is just a matter of time until this other company goes the same way.

Also, it didn't take them long to go and publish my not paid for work!

Any tips would be very welcome!


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Thomas T. Frost  Identity Verified
Member (2014)
French to Danish
+ ...
Mandataire judiciaire Nov 30, 2015

When a company is bankrupt, in receivership or similar, you need to file a claim with the Mandataire judiciaire appointed by the court (at least, that's what they call it in France), and within the legal deadline. In France, you can look up such information in BODACC. I don't know what they call it in Belgium.

It would be wise to look up both companies, and also to check the Belgian company register to be sure the two companies really are distinct, and not just two different names for the same company.

When a company is bankrupt, it's because they can't pay their bills, so it sounds strange when they say you would be paid later. Usually, you are only paid if there is any money left when higher-ranking creditors have been paid.

I've already lost money twice in France on a bankrupt car dealership and a bankrupt solicitor, and a friend lost money on a bankrupt French publisher, and my experience is that your chance of getting paid is slim.


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Lori Cirefice  Identity Verified
France
Local time: 11:16
French to English
Two things Nov 30, 2015

Check the status of both companies on the Belgian company registration website.

Lodge your claim with the mandataire judiciaire as Thomas suggests - I'm not familiar with the process in Belgium but you might start here... https://e-justice.europa.eu/content_business_registers_in_member_states-106-be-fr.do?member=1

Usually the company itself should inform you about the contact details of the mandataire judiciaire. In any case, you probably won't see much of your 200€... and if you do, it won't be any time soon.

As for the 500€ due from the other company, if it is already past due, then start the recovery process immediately. Registered mail with final notice, followed by legal action 8 days later if they don't pay up. You might try the European small claims procedure, I believe Sheila has posted about it on these forums, try doing a search for more details.


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Gabriele Demuth  Identity Verified
United Kingdom
Local time: 10:16
Member (2014)
English to German
TOPIC STARTER
Thank you for the links! Nov 30, 2015

It would be good to be able to check what the actual situation is with these companies.

Yes, I was thinking of sending a registered letter for the 500 Euros and then passing it on to a debt recovery firm?

I am not sure how the European small claims procedure works, but hopefully Sheila might be along soon?

With my option I thought that there is a chance of the registered letter being returned if there is no-one at the offices.


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Philippe Etienne  Identity Verified
Spain
Local time: 11:16
Member
English to French
Confirmed Nov 30, 2015

Thomas T. Frost wrote:
...and my experience is that your chance of getting paid is slim.

You have to make yourself known to the people who manage the bankruptcy.
But don't be too hopeful if it works like in France, loans (banks), taxes and wages come first, and there is usually nothing left after that to pay standard providers.

Indeed it would be a good idea to recover dues from the other company at once.

I faced two bankruptcies in France (2001 and 2010) totalling EUR4700, and I didn't get anything after years of procedures. But it's ok, because banks and the tax office certainly need the money more than I do.

Philippe


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Kevin Fulton  Identity Verified
United States
Local time: 05:16
German to English
Don't hold your breath Nov 30, 2015

Under the bankruptcy/receivership statutes of most countries, unsecured creditors (service providers, credit card companies, etc.) are at the end of the line when it comes to getting paid. However, you should file any paperwork necessary to document your claim, in the event the company's assets cover at least a partial payment to unsecured creditors.

As for the second company, could be a tax dodge or a means to safeguard assets, and it's probably unlikely that it would accept liability for claims against the other entity.
Good luck!


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Sheila Wilson  Identity Verified
Spain
Local time: 10:16
Member (2007)
English
+ ...
Courts can't do anything if the company is bankrupt Nov 30, 2015

You might as well save your money if it has really gone into receivership or has already been wound up. There's a set procedure to follow and that's the only one that's worth pursuing. As has been said, you need to get hold of the details of the lawyer who's involved. That will be in the country's register of companies - I'm sure it's online in Belgium though you'll probably have to pay a little for access to the information. You'll need to send a copy of your invoice along with any other relevant information to him/her, asking for your claim to be registered, and you'll get back a formal reply. AFAIK, one of two things might be happening:

They might be trying to get the company back on its feet. If this is so and if your invoice is dated after the receiver was called in, it is guaranteed payment, AFAIK. You can even continue to accept work from the company as you're guaranteed to be paid, and on time. I've had that happen and it was a great feeling as there had always been a definite risk associated with dealing with that particular company before then. However, any invoice dated before that date will only be paid if the refloat works and the company starts operating on its own again and making money. In my own case, they folded along with one of my unpaid invoices.

They might just fold it there and then if the situation is hopeless. In that case, you need to follow the same procedure of registering your claim. However, most translation agencies have few realisable assets. With no stocks to sell, just some computer equipment with a low resale value, and often working from rented premises, there isn't usually anything left once the services suppliers, the banks and the courts themselves have had their share. We come right at the bottom of the list.

Edited to add that in the case of unpaid invoices with an associated company that's probably heading the same way, that's one of the few cases where I personally would think about calling in a recovery company. Normally I prefer the court route, as you get 100% of what's due, at least. But the courts are slow and are really only good for the "won't pay" clients, not for the "can't pay" ones. A recovery company can send someone along with a bailiff and demand payment there and then. They have their ways and can perhaps get your money for you straight away. In essence you'll be jumping the queue. They'll take maybe 30% but at least you'll get 70%.

[Edited at 2015-11-30 16:01 GMT]


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Gabriele Demuth  Identity Verified
United Kingdom
Local time: 10:16
Member (2014)
English to German
TOPIC STARTER
Thanks Lori! Nov 30, 2015

With your link I just found out that the second company which owes me the bulk is still an active company that has only been established in July this year, the bankrupt company was more established (15 years).

And yes, I think I have to quickly if I want to recover anything.


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Gabriele Demuth  Identity Verified
United Kingdom
Local time: 10:16
Member (2014)
English to German
TOPIC STARTER
Thank you Sheila! Nov 30, 2015

Quickly received some information from Lori's link and will register anything owed, once I have found out how. The last invoice was definitely sent after they filed bankruptcy, but that was only for 40 Euros, well, but I think I can still be hopeful to recover the bulk of 500 Euros.

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Sheila Wilson  Identity Verified
Spain
Local time: 10:16
Member (2007)
English
+ ...
Good luck! Nov 30, 2015

Gabriele Demuth wrote:
The last invoice was definitely sent after they filed bankruptcy, but that was only for 40 Euros, well, but I think I can still be hopeful to recover the bulk of 500 Euros.

Keeping my fingers crossed for you. Do share any useful info here, or just let us know how things go.


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Gabriele Demuth  Identity Verified
United Kingdom
Local time: 10:16
Member (2014)
English to German
TOPIC STARTER
Thanks all! Dec 1, 2015

I have been considering sending a registered letter to the company asking for payment of the overdue invoices that are not included in the bankruptcy and threatening with a debt collection company should payment not be received within X days, adding the fee to the invoices.

To me this seems to be the easiest course of action right now, as I am very busy and do not have the time to waste on their behalf, finding out the ins and outs small claims procedure in Belgium.

By googling I found some companies that offer international debt collection and they don't charge if the monies are not collected.

I would be very interested to hear anybody's experience and opinions about debt collection firms, or maybe one that you can recommend?


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Gabriele Demuth  Identity Verified
United Kingdom
Local time: 10:16
Member (2014)
English to German
TOPIC STARTER
Update Mar 17, 2016

I received payment today!!! This non-paying direct client with 2 companies finally paid the best part of his debt (Euro 730 of Euro 900).

As I had to believe that one of the companies was in receivership, but could not find any evidence of that I handed the matter to a debt recovery agency in December 2015, they assured me that they had agents in Belgium and that they could probably recover the debt.

I waited .... and I waited ... no more communication from them either.

Two weeks ago I sent them repeated e-mails and they eventually told me that one of the companies went into receivership on 16 January 2016, that they couldn't recover anything but offered to pass the matter on to their legal department at a charge of GBP 250 per hour!

Then I tried to find out about the European Small Claims Court and was surprised how it is! However, before sending off the form, I tried to get in contact with the two directors again, via LinkedIn, e-mail ... one of them answered, explaining that he had left the company in January and then he passed the buck to the other.

All my previous letters and e-mails were ignored by them, and probably the letter from the debt collection agency (if they sent one), only when I threatened with the European Small Claims Court, and the fact that I had all e-mail conversation confirming their order, admitting to the debt, I pointed out that my work was published online, and I included the address of the court in his home town where I would send it to, then he paid up!

I feel if I had done this in December and not relied on the debt collection agency, who didn't appear to have much effect, I might have been able to recover the full amount.



[Edited at 2016-03-17 15:34 GMT]


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Sheila Wilson  Identity Verified
Spain
Local time: 10:16
Member (2007)
English
+ ...
Congratulations on a pretty fair outcome Mar 17, 2016

Gabriele Demuth wrote:
I received payment today!!! This non-paying direct client with 2 companies finally paid the best part of his debt (Euro 730 of Euro 900).

Two weeks ago I sent them repeated e-mails and they eventually told me that one of the companies went into receivership on 16 January 2016, that they couldn't recover anything but offered to pass the matter on to their legal department at a charge of GBP 250 per hour!

So you paid the debt recovery company nothing?

only when I threatened with the European Small Claims Court, and the fact that I had all e-mail conversation confirming their order, admitting to the debt, I pointed out that my work was published online, and I included the address of the court in his home town where I would send it to, then he paid up!

I feel if I had done this in December and not relied on the debt collection agency, who didn't appear to have much effect, I might have been able to recover the full amount.

It is possible, but it would have been very tight timewise, and anyway you'll never know. At least you didn't lose more than you'd have paid the debt recovery company to collect the debt.

But certainly printing off these orders and sending them to clients seems to be a good course of action, and it's free if you don't count your own time.


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Thomas T. Frost  Identity Verified
Member (2014)
French to Danish
+ ...
Court / procedure Mar 17, 2016

To keep things clear, it's important to note that there is no such thing as a "European Small Claims Court"; what we're talking about is the "European Small Claims Procedure", as described on https://e-justice.europa.eu/content_small_claims-42-en.do , but the procedure makes use of existing, national courts (hence, the experiences using the procedure may vary a lot from one country to another, and not all EU Member States participate).

It may sound as an insignificant detail, but it's still important to understand that there is no such supranational court.


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