We cannot pay them or they will not pay me?
It is when cash flow tensions arise that you start to see potential difficulties and begin to ask questions such as:
- How can I improve my working capital requirement (systematic reminders with reference to the law)?
- Do your general terms and conditions of purchase/sale protect you against a debtor acting in bad faith?
- Financing is an option, but how much are you prepared to pay? How do you know if you need a loan (government-backed or not) or factoring?
The key to any collection problem is the guarantee.
You just need to protect your receivables: attachments/pledges on your debtor are possible before initiating hostilities. An unenforceable judgment is a fundamental error, whereas enforcement can be guaranteed by interim attachments, i.e. attachments made before going to court.
A pledge on the share capital of your debtor acting in bad faith will entail his bank refusing any further loans and withdrawing his overdraft facility.
He will therefore think twice before being hauled before the courts, and try to reach a settlement with you.