Strategies for Getting Paid Faster

While it is often difficult to say no to a debtor wanting to pay at least part of their debt, the potential downsides involved in doing so are in the form of a subsequent “preference claim”. These are claims by liquidators of companies which may be made against a person who has received payments from a company that have been made in the 6 months prior to what is known as the “relation-back day”. As this date can be very different to the date of the appointment of the liquidator, the relevant preference period for a company can sometimes stretch back a significant period longer than 6 months prior to the date the debtor company actually ceased trading. We provide examples of key matters to work on getting in writing which will be particularly useful in circumstances where a customer is facing financial difficulties and is making decisions about who it “needs” to pay.

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