
Is anybody else not getting paid “because Covid”? - madaxe_again
In the last few days I’ve had two clients, large American firms, say that they are suspending all payments due to covid. One had the excuse that they couldn’t pay because their accounts team can’t remotely access their systems used for contractor payments, and hoped to resume payments in April. The other simply said they were suspending all payments until covid is over. These are both $100M+ businesses.<p>This has me scratching my head, as the banks sure as hell expect me to pay my mortgages on time. No mortgage holiday available without a steep penalty and re-evaluation of interest rate after the holiday... I have savings, but they won’t last forever with zero income.<p>Anyone else in the same boat? Is this even legal for firms to do?<p>I have standard force majeure clauses in my contracts - but they allow early termination in a pandemic, not not paying.
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MarcoSanto
Same problem here. Where are you located? Not US, I suppose. This sounds like
something that call for its own subreddit, because, even if there might be
remedial lawsuits you can bring to them, it will be expensive to litigate in
US. I am afraid they count on that. Given this is a real emergency/problem for
everybody now. In Italy, government has temporarily forbidden the actioning of
repossession/penalties clauses in mortgage contracts and has suspended payment
of taxes. I would recommend banding together with other people in your
country/same situation.

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madaxe_again
My company is domiciled in the U.K., and that’s where the mortgages are - I
live in Portugal. Unfortunately only two lenders in the U.K. have said they’re
granting concessions, and when I spoke to both of my lenders on Friday after
I’d heard from clients, they both said that yes, I can have a holiday, but
only on the terms I mentioned - as far as they’re concerned it’s all BAU until
the government says otherwise.

I mean, if your business or income is entirely domestic, I suppose this is ok
- but if your income is primarily from a country that has now declared a state
of emergency and has companies using this as an excuse to shirk their bills,
it’s something of an issue.

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MarcoSanto
The only advice I may be able to give you, and to myself, is talk to an
association of SMB in England. Not sure it helps, but we are all in the same
boat. No payment here also.

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Animats
No, it's not legal. Start by reporting them to the credit reporting companies.

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BjoernKW
Fortunately, nothing like that has happened to me so far.

It's definitely not legal and, in my opinion, highly unethical as well. While
it's understandable that companies scramble to protect their cash flow now one
still has to pay one's dues.

Since you're based in another country it'll be difficult to quickly enforce
your claim unless they have a local branch.

Invoice factoring might be an option but in the current climate this could be
quite expensive. Still, getting paid x % of the original invoice amount is
better than getting nothing.

Taking out a loan on accounts receivable might be another option.

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anigbrowl
Better team up and make the banks accept the same terms. Write a letter saying
it's happening and will be in effect until the emergency is over. You might
even be able to find a clause in your mortgage agreement about how to do it.
Send it to their legal department and say they have 7 days to reply, or
something along those lines. Chances are their legal/administrative people are
not in the office right now anyway.

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madaxe_again
The problem is that in the U.K., there is no official state of emergency, so
nothing for me to use on that angle, unfortunately - when I spoke with them
both on Friday, they said that unless the govt announces an emergency and
explicitly instructs them otherwise, it’s business as usual.

~~~
anigbrowl
Team up with others and swamp them in paperwork. There are probably people
organizing rent strikes right now; Italy has frozen many financial transfers
so you'll find many takers. Good luck.

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ojosilva
Brace for impact, be flexible (as these are extraordinary circumstances) and
forget about lawsuits or credit reporting as that would be very bad rep for
you or your business as it's somewhat of an ugly gesture - if you care about a
reputation anyway. Look for government assistence if needed to pay bills by
getting some of the smb credits being made available. Borrowing on invoice
debt may be an option at your local bank. Payment enforcing is basically
shutdown anyway. This is a major, WW shutdown, primary needs are top and
invoiced payments are low in everyone priorities right now.

And this could go on for months, not weeks as some believe. If you take up new
work now, request payment upfront.

Disclosure: I'm in Europe and I run a sw SMB with many €100M+ clients who have
frozen all payments.

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Beman30
I am not 100M company, but I have always paid my dues. Since CV came into
place (a month ago) I've earned nothing, even if my business were not locked
down I had no more customers, so no more money. I ve called all my debtors and
explained, same they did with their debtors and so on, usually chain should
finish to banks (mortgages, loans, Ecc...) Tomorrow Italian government should
put in place a lot of stuff, one is the freezing of debts to banks. Over here
we are all on the same boat so we deeply understand each other, no litigations
on sight. I also planned to pay back in a couple of months when things will
start to move back again.

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fulafel
Some banks are offering breaks on mortgages, so don't make too many blanket
assumptions about that.

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judlaw
I run a legaltech called 40Q, happy to help and figure out if there is
something that can be done here. Is on a case to case basis. Feel free to
reach out.

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chewz
In times like this cash is king. You avoid paying your suppliers to keep as
much liquidity as possible for yourself.

