Q) One of my creditors recently stopped trading. He ran into some difficulty a couple of months back and hasn’t been able to pull himself out of it. At the time, we had a verbal agreement that he would continue paying off his account with us on a monthly basis but he’s since reneged. His company is ‘dissolved’ according to the CRO website and he’s taken up a job with a competitor. What’s most infuriating is his refusal to explain – when we can get hold of him – why there was no creditors meeting held. As far as I’m aware we can’t recover any of our debt because the company hasn’t been formally wound up. Is that right?


A) If the company in question is ‘dissolved’ in the eyes of the CRO, it probably means that your client didn’t lodge company accounts with the Revenue. If that’s the case, then the best avenue open to you is to initiate legal proceedings and ask the courts to restore the company so it can be formally liquidated. The problem here is that you’ll have to stump up the costs, which can be expensive. On the flip side, if the company was dissolved because of failure to file accounts, the directors may be personally liable for any outstanding debts.


Before you go down this road though, file an official complaint with the Director of Corporate Affairs and the CRO. This may result in your creditor being forced to appoint someone to officially wind up his business, but there’s a lot of bureaucracy involved so prepare yourself for the long game if your complaint is upheld and investigated.


In a situation like this, it’s unlikely that you can move the debt on to a specialist debt collection agency either because as it stands, there is no company to liquidate – legally, the company ceases to exist and all of its assets are vested in the Minister for Finance. Unfortunately, you can’t even apply for a creditor’s voluntary liquidation because of the same reasons.


So, your first step is to get legal advice. Of course, this is going to be a costly task so consider whether the amount that you’re owed is worth the hassle and the expense – there’s no guarantee that you’ll come out the other end with your account fully paid up and your expenses for pursuing the matter reimbursed.


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