Business Loan debt, help.

LaRouge

Is it possible to make a settlement on a business loan?

The amount is 170k, and hasn't been paid since august last year, due to serious financial difficulties. We have tried to contact the bank several times and no one knew who was in charge of the account.

It is now in the hands of a credit service to recover the money.

Has anyone had an experience like this, who could offer advice?

Thanks in advance.

Mr_F_Dorsetty

I've spent most of my working life around finance in one form or another and have been Bankrupt twice so I have experienced most things from all sides.

If the credit service is working on behalf of the people you originally owe that is different than if they have bought the debt. After only 5 months I suspect they are trying to collect on the lenders behalf but I could be wrong.

If they are collecting for the original lender then yes, make an offer. Make the lowest offer you can without appearing to be plain rude, I'd offer maybe 45% and see what they say. You have to offer enough to make court a hassle, as court is a real hassle they'll take a fair hit no doubt to get cash without court aggravation

If they are collecting for themselves as they have bought your debt then they will very definitely take a bid. They'll tell you they won't but that is simply not true.

But you might have to pay more than to the original lender. it depends on how much they have paid in the £ for the debt. Fresh debts like yours would be substantial, maybe as much as 50p in the pound so they'd want at least £100k out of you to make it worth their time. Do realise if they have bought the debt then it is legally theirs and ALL actions are open to them as to the original person you owe.

I do not know all your circumstances obviously but it is all a balancing act, for both them and you.

Do know however they are just as desperate to get you to pay something without recourse to court as you are to get them off your back.

[Deleted User]

Does the lender have a personal guarantee from you for the loan? Is it secured against your house for example? If it is and there is sufficient equity then the lender is unlikely to accept a settlement from you

LaRouge

The collecting agency is Wescot credit services. I am unsure if they have purchased the loan.

Thank you for you help.

Mr_F_Dorsetty wrote: »

I've spent most of my working life around finance in one form or another and have been Bankrupt twice so I have experienced most things from all sides.

If the credit service is working on behalf of the people you originally owe that is different than if they have bought the debt. After only 5 months I suspect they are trying to collect on the lenders behalf but I could be wrong.

If they are collecting for the original lender then yes, make an offer. Make the lowest offer you can without appearing to be plain rude, I'd offer maybe 45% and see what they say. You have to offer enough to make court a hassle, as court is a real hassle they'll take a fair hit no doubt to get cash without court aggravation

If they are collecting for themselves as they have bought your debt then they will very definitely take a bid. They'll tell you they won't but that is simply not true.

But you might have to pay more than to the original lender. it depends on how much they have paid in the £ for the debt. Fresh debts like yours would be substantial, maybe as much as 50p in the pound so they'd want at least £100k out of you to make it worth their time. Do realise if they have bought the debt then it is legally theirs and ALL actions are open to them as to the original person you owe.

I do not know all your circumstances obviously but it is all a balancing act, for both them and you.

Do know however they are just as desperate to get you to pay something without recourse to court as you are to get them off your back.

LaRouge

It was an unsecured loan. No guarantees.

Thank you for your response.

victoria61 wrote: »

Does the lender have a personal guarantee from you for the loan? Is it secured against your house for example? If it is and there is sufficient equity then the lender is unlikely to accept a settlement from you

dealer_wins

£170K loan to a small business without a directors guarantee is about as rare as a lottery win. Are you sure of this fact OP?

Mr_F_Dorsetty

LaRouge wrote: »

It was an unsecured loan. No guarantees.

Thank you for your response.

Really? Unsecured? That's fairly amazing or some other word starting with F.....

Anyway, on the basis you have given you need to know whether the people chasing you have bought the debt or not, it matters.

Having just perused the web site for Wescot credit services. it could be either.

If they have bought the debt then they will be like a Pitbull biting a Postman, they will not let go... collecting for someone else tends to work on how much hassle you are to the collector, if every step is like wading through molasses they may well just collect easier debts and sort of 'back burner' you.

The actual best advice I can give is:

* Find out who owns the debt
* Talk to them

Ignoring them never works, remember, they do this for a living. Also important to note they must be pretty good at what they do because Wescot credit services is a big operation and they are still doing it.

Tixy

Is your Company still trading? does the Company have assets?

A creditors will only be likely to consider accept a reduced settlement on a debt when they believe that is the best chance of them recovering as much as they can on the debt in a relatively short period.

If the Company is now in a position to offer a sizeable settlement then the creditor may also be of the opinion that the Company is also in a financially good enough position for it to be worth their while taking court action to try to recover the whole debt.

Brock_and_Roll

Chaps,

If you see the OPs post from May last year you will see that the business has been sold but the bank loan & tax debt remains outstanding.

I have to say as a banker myself I really cannot imagine any situation where a business loan would either not be secured against the assets of the business (e.g. a commercial mortgage) which would require settlement before the business is sold, or secured by way of personal guarantee.

I would urge the OP to check paperwork carefully. If it truly is an unsecured loan, perhaps the lender should be named and shamed for breathtaking incompetance!

Tixy

Brock_and_Roll wrote: »

If you see the OPs post from May last year you will see that the business has been sold but the bank loan & tax debt remains outstanding.

OK, so it sounds like you sold the trade and assets of the business, not the limited company (as obviously if you had sold the shares in the company the debt would still belong to the company and be nothing to do with you).

So what is the situation with the Company at the moment? What assets does it have against these liabilities? If the assets (presumably including the proceeds of the sale) are less than the external liabilities (excluding any directors loan owed to yourself) then I'd imagine the bank/creditor may well accept a reduced full & final settlement.

If the remaining assets/proceeds of the sale including any directors loan owed from yourself are for more than these liabilities then I would imagine they would not.

Sounds like it would be better to speak to your accountant on the situation and possibly on winding up the company rather than posting on a forum where people don't have enough information about your situation to be able to advise.

Brock_and_Roll wrote: »

I would urge the OP to check paperwork carefully. If it truly is an unsecured loan, perhaps the lender should be named and shamed for breathtaking incompetance!

Quite

LaRouge

Thanks.

The business is sold and many debts paid from what was left.

The loan for the business remains. It was an unsecured loan. One of the conditions for the loan was to have an insurance policy to cover my ex partner in case of death. that was all that was required at the time.

He wants to offer a part settlement, which will be financed by my ex-partners parents.

I hope that this works for him.

I want to thank you all for taking the time to respond.

Tixy wrote: »

OK, so it sounds like you sold the trade and assets of the business, not the limited company (as obviously if you had sold the shares in the company the debt would still belong to the company and be nothing to do with you).

So what is the situation with the Company at the moment? What assets does it have against these liabilities? If the assets (presumably including the proceeds of the sale) are less than the external liabilities (excluding any directors loan owed to yourself) then I'd imagine the bank/creditor may well accept a reduced full & final settlement.

If the remaining assets/proceeds of the sale including any directors loan owed from yourself are for more than these liabilities then I would imagine they would not.

Sounds like it would be better to speak to your accountant on the situation and possibly on winding up the company rather than posting on a forum where people don't have enough information about your situation to be able to advise.



Quite