Overdraft settlement fee???

miss.average

hi
my husband had a £10k business overdraft ( most of which is made up of interest charges and fees) - In January this year the bank wrote asking for it back. We don't have that sort of money - so they suggested we pay £1500 that day and £250 a month until August when, they would look at the situation again,and if we'd kept to the arrangement then we could maybe be offered a loan to pay off the rest.
We currently owe £7600, and we have been offered a loan - over 5 years @ 13.5% interest.
My parents have offered to pay the overdraft for us to stop us having to pay the interest.
Before we pay it off, is it worth us ringing the bank and asking for a settlement fee?? and if we do will there be any negative consequences?
any advice as always gratefully received
thanks in advnce

loveka

You can always ask! As business debts aren't covered by the consumer credit act nothing shows on personal credit files.

My partner got a settlement figure of 70% on a business overdraft he had personally guaraneed- but in his case the company had gone into liquidation and he was unemployed.

When he guaranteed the overdraft the business manager told him that this wasn't guaranteeing against our house. Of course, as soon as the business went into liquidation they were going to go to court to get a charging order. It was a hellish time- bad enough that the business went then the fear that despite what they said they would come after the house. A warning to anyone who guarantees business debts- there is no such thing as an unsecured loan/overdraft- a quick trip to court and it becomes secured. That is why we used my partners redundancy money to pay the bank off.

Good luck with it all.

annmaria2

you are right loveka about unsecured debts becoming secured through courts

good luck

miss.average

thank you for your responses.
My husband is ringing the bank today to ask for a settlement fee. We have until next week before we have to sign the loan papers committing us to 5 years of payments.

so fingers crossed!