An unpaid account usually begins as a dispute between two businesses. The creditor believes payment is due, while the debtor questions the work, disputes the amount or promises to pay once a temporary cash-flow problem has been resolved.
A letter of demand, summons and ordinary debt collection proceedings may be the appropriate response. However, the position changes when the unpaid debt is no longer an isolated contractual issue and becomes one indication of a broader financial collapse.
Creditors who fail to recognise that change can spend considerable time and money obtaining a judgment, only to discover that there are no assets available to satisfy it.
Disputed debt or inability to pay?