The Nuclear Option

I promised you the final word would be what I'm calling the Nuclear Option.

I'm not recommending this to anyone as an approach to managing late payments, as it really does seem to be pretty serious, but wanted to include it for a number of reasons.

Firstly - it goes to show how you should never just "chalk it up to experience" and give up on chasing a late payment. There's always another step in being able to escalate, and the law is on your side.

Secondly - it makes a really clear distinction between not being able to pay, and simply being late in paying. If a company is able to pay you, they have no excuse not to pay you on time. If a company is not able to pay you, they need to be discussing this with you, not just ignoring your invoice.

Thirdly - I just find these things interesting.

It's called Compulsary Liquidation.

Compulsory liquidation is a formal insolvency procedure which results in a company being forcibly shutdown in order to pay their debts. Yup. You can take proceedings against a company, which means they have to close down.

Here's the process:

If you're owed some money (more than £750), and it's been outstanding for more than 21 days, you can issue what's called a Statutory Demand - this is your 'red bill'.

Once the Statutory Demand has been issued, if payment has still not been made, you can issue a "Winding Up Petition", which gives the client 7 days before an advertisement is served in the Gazette - where there's a sort of 'rogues gallery' for Companies House to officially notify companies who are not behaving nicely.

Following the advertisement, the business may typically find their bank accounts frozen, preventing the company from being able to operate, and then a judge will get involved after another 7 days have passed, who will review your WUP, and decide the next steps.

If the court is satisfied that the company should be liquidated, they issue a Winding Up Order and an Official Receiver will then be appointed, who will take over control of the company, meaning the existing directors will cease to have any influence over the day to day running of the business.

Boom. You just took down Amazon.

Or the local community group bake sale committee who you designed a poster for.

Legally this proceeding is to force a company which is unable to pay you to liquidise its assets so that your outstanding payment can be made. It's for companies who are unable to pay you, rather than unwilling to pay.

This approach of course should never be used as a 'threat' - and if you're reading this because you're wanting to better look after your own mental health at work, engaging yourself in full-scale business warfare and legal proceedings is probably not the option you ever want to take - so do everything you can to resolve issues with a friendly conversation first.