Full and Final Settlement

Michael995

Hi

I am looking for some advice please, I have recently had to liquidate my business which was running for 5 1/2 years leaving me with no income. I was expecting to go bankrupt but my parents have offered to help out if I can reach agreement with the people I owe money to. At present I have never missed a payment to a loan or credit card, however as I have no income and the debt level has increased due to a number of personal guarantees I offered while running the business I see no way of keeping up my commitments.

I do have a job offer which I am going to accept, however it is less than 50% of my previous income, I have been offered 18k a year. I will keep looking for better paid work.

My personal debts now total about 70k my parents have offered me 15k, so I was wondering if anybody thought my creditors would accept 20% in full and final settlement?

Any advice would be great.

cambspartan

Hi Michael,

I'm sorry to read about your situation, I know of a few people that have had to give up their businesses.

The general rule I find is that most creditors would accept approx. 60-70% of the debt as a full and final settlement. What might be a better idea is to look at a lump sum IVA.

The creditors would need to take a vote on whether to accept the offer or not but if you get a majority vote through anyone who refused the offer would have to be included.

The next thing I would do is to get further advice on this from the likes of CAB, Payplan or Stepchange. If you don't want to speak to anyone I know Stepchange have an online tool called Debt Remedy. I hope this helps!!

Michael995

cambspartan wrote: »

Hi Michael,

I'm sorry to read about your situation, I know of a few people that have had to give up their businesses.

The general rule I find is that most creditors would accept approx. 60-70% of the debt as a full and final settlement. What might be a better idea is to look at a lump sum IVA.

The creditors would need to take a vote on whether to accept the offer or not but if you get a majority vote through anyone who refused the offer would have to be included.

The next thing I would do is to get further advice on this from the likes of CAB, Payplan or Stepchange. If you don't want to speak to anyone I know Stepchange have an online tool called Debt Remedy. I hope this helps!!

Many thanks for this, I am waiting for a call from Stepchange that should be coming this morning. I am also going to talk to the company who are dealing with the liquidation.

My largest debt is to Nram, after that it's Barclays, I was preparing for bankruptcy, but thought this maybe a way to give me creditors something rather than nothing, but if the won't go for it I suspect they will end up with nothing.

double_mummy

its not likely they will go for something so low as they havent defaulted yet

Michael995

double_mummy wrote: »

its not likely they will go for something so low as they havent defaulted yet

Thanks for your reply, I am aware that they will be very reluctant, but the letter I am going to send them spells things out very clearly that its either accept this or I am going bankrupt and with zero assets they will get nothing at all back.

To be fair its an awful situation for everybody concerned.

sourcrates

You may be best off going Bankrupt and having your folks keep the 15 grand, otherwise it may be swallowed up if they make you Bankrupt anyway ???

Michael995

sourcrates wrote: »

You may be best off going Bankrupt and having your folks keep the 15 grand, otherwise it may be swallowed up if they make you Bankrupt anyway ???

If I go bankrupt my folks won't give me the 15k, they are trying to help me avoid bankruptcy, so it really will be a take it or get nothing situation for my creditors. If my creditors agree they will give the money direct to my creditors not to me.

Anyway Ive spoken to Stepchange, they are going to come back to me, but there is a lumpsum IVA which might help me.