Impending Bankruptcy

Mordlaw · 2 July 2015 at 2:50PM

Hi Everyone

I have a situation unfolding, which feels like its snowballing and no matter what i seem to do I can't make it stop.

In really simple terms. I had a loan from my employer which was being paid from my salary each month. No agreement was put in place, despite me asking for one.

I left the company in feb this year and agreed a repayment structure. However in early June they decided to call the whole of the debt in. (i had not defaulted and there were no arrears) When i queried it, they told me that the loan wasn't actually with my employer but another company owned by our chairman and there was no agreed repayment schedule with that company, as such nothing has been repaid to date. I told them this was really bad behaviour, i can prove I'm paying the debt and that i believed it was with my employer and followed their instruction regarding repayments.

Apparently they have an email from me stating that i acknowledged the loan was with this other company at the time it was arranged (Mar 14) and not my employer. All the advice I've taken seems to constantly contradict the previous advice and I'm getting a little flustered!

Yesterday they issued me with a Statutory Demand for the original loan amount plus interest and stated on the demand that the evidence of an agreement is in email. I've been told that all they need to do is prove that i knew and accepted the debt was with this other company and not my employer and regardless of any other side agreements or repayments, "factually" the loan has not been repaid in any way and no repayment agreement is in place, so i should just brace myself for whats coming!

Understandably this has scared the bejesus out of me. I have no assets, no savings and nothing of any value. (I'm 15 months after a divorce so slowly rebuilding my life).

Im very concerned what will happen if this goes to BR and the implications this will have for me in my career and my future.

I simply don't know what to do and feel like I'm running out of options. I've tried everywhere to get more borrowing, even at stupidly high rates and the most i can get is £5k but that wont cover half of what they state i owe!

Im also worried about my partner. She is linked to me via a joint account only. But she has recently bought a house, we discovered she'd get a better rate of interest if she did it on her own and we left my credit rating to heal from the divorce another year or two before remortgaging. We've been saving like mad to get the deposit together which came from both our income. If I'm made BR can the OR look at her house, which i don't own legally at all (we're not even living in it yet, its undergoing some repairs) and the money i contributed in order to purchase it and consider it an asset?

I don't mind admitting this is scaring me to death, where ever i turn i just seem to hit a brick wall because my employer is saying the loan is with another company and they appear to have evidence to show i knew that!

I dont know where the hell to turn

tigerfeet2006 · 2 July 2015 at 3:44PM

Have they showed you proof of the email?

Mordlaw · 2 July 2015 at 4:02PM

No, but quoted it in letters and I've since been back through my bank accounts and seen that the money was infact deposited by the other company not my employer.

Its fairly likely that I did send that email acknowledging the loan was from this other company. But i don't recall.

I asked repeatedly for a loan agreement at the time but they refused. Im finding it very frustrating that their behaviour seems very shark like, but there does appear to be a damn thing i can do about!

TheGardener · 4 July 2015 at 10:05AM

I'm certainly no expert in the field but my gut instinct is that without a credit agreement and a schedule of repayments they haven't got much evidence of a loan and 1 email doesn't really cut it in my view and I suspect any judge looking at this will share that view. I think you need to get legal advice from someone with expertise in this field. Some solicitors will give a free consultation type appointment. Have you tried the debt charities like NDL and StepChange?

In case it does get messy, I would break the financial link with your ex if you want to protect her from your credit rating.
You don't say how much the debt is?

chanz4 · 4 July 2015 at 12:14PM

emails can be edited, if they do try it ask them for proof of the headers and that it was from / to your computer bet they cant as only retained for 30 days on mail servers

mwarby · 4 July 2015 at 4:52PM

It's gonna cost them £1000+ to make you bankrupt, bankruptcy fees are huge(I was earning 25k and the fees would have meant zero payout to creditors). I suspect that it may never come to bankruptcy, once the company are made aware of the costs and prospects of getting the £5k

I'm not saying ignore it, I'm not saying don't pay it, I just doubt they'd do it

Just checked it's £1030 thats DIY, no lawyer fees

youngbuck2 · 4 July 2015 at 5:21PM

So the facts are:

-You had an amount of money loaned to you through work. This was repaid monthly from your wages. There was no repayment plan/structure, just an informal/unwritten agreement that some of it would be repaid monthly from your wages.

-You left the company. You came to an agreement with your work for a repayment structure.

-A short time later, the full amount is requested from you as the loan was from a separate company who does not have a repayment plan with you and there is no proof of payments to them.

My view:

They don't have a leg to stand on.

First of all, they have no written agreement or ANY proof that you have a financial arrangement with this other company owned by the boss. As far as you know, your repayment plan was only with your company for the loan (I assume you have emails/letters between you and your company once you left discussing the repayment plan and acknowledging you owe them money). You agreed to this and began repaying the company.

A different company (I'm assuming easily identifiable as "different" i.e. a different name etc) approaches you and states you owe them the full amount. First of all, you do not have a written or otherwise agreement with this company. Second of all, the only agreement you have to repay the money is via a repayment plan you AGREED with your company.

The way I see it, these are the answers:

1. You don't owe that other company a penny. If there is no proof and agreement, written or otherwise for this money, then as far as they law is concerned, you don't have a financial agreement with them.

2. You DO however have a financial agreement with your company that you were aware of. This was an informal written agreement via email/letter/phone call that you would repay the loan with a REPAYMENT PLAN.

So, if I were you, I'd explain to your company you only have an agreement with them and only have a repayment plan, not an agreement to pay in a lump sum. You still obviously owe the money, but on the terms you agreed, via a repayment plan and only to that company.

If you have no evidence of an agreement with the bosses' other company at all, and they take you to court, they will lose.

Mordlaw · 4 July 2015 at 8:01PM

Thank you all so much. The advice has certainly made me feel a little more confident in facing this down.

It also appears that the stat demand has only been issued to me by email. Not recorded delivery or in person. As I understand it, they can't do it via email alone? I haven't acknowledged it, even though the solicitor request that I do, I haven't. Then yesterday the CEO of my new employer had an email from the chairman introducing himself and seeking a meeting. While he didn't mention directly me, or this ongoing situation. It's obvious that's what he's trying to do. Knowing full well he CEO would ask me what it's about as they have no history, never met and work in different circles. Thankfully my new CEO is aware of what's going on and has ignored him. But it makes me begin to believe this Stat Demand could well be a dud. Why haven't they sent it via recorded post, or used a process server. And 3 days later email my new boss if not just to apply more pressure to me to try and get me to respond and pay more and sooner, knowing I'm unlikely to acknowledge the Stat Demand they sent on email.

This then raises the issue of harassment and how I hold them to account for it! But one problem at a time!

antrobus · 4 July 2015 at 8:31PM

youngbuck2 wrote: »

....My view:

They don't have a leg to stand on.

....

I'm inclined to the same view. But two things occur to me;

1) Doesn't the CCA still apply to loans made by an employer to an employee? In the sense that the employer has to comply with pre-contract info etc.

2) Whilst I can understand that an employer making the odd loan to an employee might not need to be licensed under the CCA, would the same apply to a completely different company which just happened to be owned by the employer's chairman?

Isn't it a criminal offence for an unlicensed person to engage in lending to consumers?

Mordlaw · 5 July 2015 at 11:17AM

From what I've been told it is and they could be in a great deal of trouble. I've also discovered that the issue of a stat demand when there is a dispute is a misuse of the process and apparently the courts take a very dim view of SDs being used as a means of collecting a debt, rather than a prelude to insolvency.

The problem is, they know I don't necessarily have the financial resources to bring them to book over this behaviour. If I did, the only way I could get costs recovered is by letting it get to court. Of course if I pay a solicitor to remind them of the law, point out their misuse and behaviour etc, they'll drag it out until the last moment before withdrawing resulting in my costs going higher and having no platform then to recover it from them. And I can't then take an injunction out to stop them from going down this route again, or continuing to harass me without starting a whole different process.

Very frustrating!

debt_doctor · 5 July 2015 at 4:33PM

Hi,

Loans from employers are exempt from the Consumer Credit Act, and an employer does not need a Consumer Credit Licence.
However, it is difficult to tell if this money is from your employer or not.
Is the 'other Company' a parent company of your employer?

Regarding no payments being made. Was the on going payment taken direct from your wages or did you hand the payment to someone? If taken direct from wages (the normal route) then wont the deduction be on your wage slip?

If a creditor has not 'done all they can' to serve the demand then the court could refuse a petition so all reasonable steps must be taken which can include;
Serving the demand personally upon you.
Writing to all known previous address.
Advertising the demand.
Service by 1st class post.

I've not heard of a stat demand served by email alone, and I do not think it is good enough in isolation.
DD

Impending Bankruptcy

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