Bank cost charges

moley2727

Hi, Hope i have posted in the correct place. I am hoping someone will be able to give me some advise.

My bank called in my company overdraft facility in 2012. A few months later my 30+ year old company went into liquidation. The banks reply when i asked why they would not support me anymore was "you are a retailer", that was the only explanation I had. The bank had a first charge over my house and they insisted I sell up and pay them back the full £60k, plus interest. One year later I had open heart surgery. I asked if the bank would freeze the interest whilst i had the op and got myself back to some level of health, they refused. I made offers of a lump some repayment, and asked if i could pay them back over 10 years, again they declined. I am still in recovery, and I think I always will be to be honest, as the op was a massive ordeal for me, plus of course the trauma of losing my company, I am a changed person, and I dont mean for the better. In the last month they agreed to waiver any interest, which is great, or so I thought. Instead they are charging a ridiculous amount of what they call costs. I worked it out at around £350 to receive and reply to an email. And £1,300 for "preparing court proceedings", it goes on. To me it is obvious that they have added interest to this cost figure. I have asked for a full breakdown and all i got was an email saying how they came to the figure of £8,000, inc. VAT.

So, I have now re-mortgaged and ready to pay them back. They have asked i sign a legal letter detailing the amounts and timings of the repayment. This letter also says that "the amount is inclusive of any interest and costs accrued in respect thereof, that it has or may have against you or that you have against the bank howsoever arising out of the legal charge over the property at xxxx ". It also says that if i don't pay within 7 days then the bank is entitled to issue proceeding against me, i have agree that i will not enter into any defence. So now they say they are charging me interest? Does this mean I cannot challenge these outrages costs at a later date?

My intention was to challenge this cost charge after this is all over, if my health allows me. It looks like they are covering themselves and this means if I sign I can have no comeback at all?

Question: If i pay them the full amount they are expecting without signing this legal letter, can they withhold the charge they have on my property? The new lender i have will take over the banks first charge for security.

Thanks for reading

dunstonh

Does this mean I cannot challenge these outrages costs at a later date?

You can challenge them later.

However, you need to be aware that you were a commercial entity. I dont know what you did but you probably had suppliers and costs and looked to recover those costs through fees or sales. That is what they bank is doing here. Solicitors charge them £x for the work and they look to recover that from you as you have created the costs.

The ombudsman no longer considers complaints about unfair charges as the banks won that court case. So, you would need a good reason for believing the charges are very much outside normal.

If you were a limited company and have gone insolvent then you may find that the bank is limited to what it can get from you as a personal guarantor (in respect of fees). So, you may wish to seek legal advice on that. If you were a partnership or sole trader then you carry the whole can.

Solicitors are not cheap and solicitors acting for banks especially not. Legal fees can mount up quickly. So, getting local legal advice from a solicitor now may be a cheaper option in the long run.

moley2727

Thank you dunstonh for your reply.

Yes I was a limited company. The bank are now coming after me for the full amount the company was overdrawn at the time of liquidation. I signed a personal guarantee many years ago for the facility, but that is not my issue.

These 'costs' which I believe are legal costs, is the issue I have. One, i have an email that says they will waiver any interest. Two, this new legal document they want me to sign says the amount includes interest and cost, so they have not wavered interest at all. Example of costs: 13 emails from them and 3 letters I received by post = £4,987.87. Is that reasonable?

I am surprised you say I can challenge them after I have signed to say I will not enter a defence. Besides s that not an admission of guilt?

Thanks again

M

dunstonh

I signed a personal guarantee many years ago for the facility, but that is not my issue.

Many of these guarantees had an amount specified on them or limited them to certain liabilities. Not all were open ended guarantees.

These 'costs' which I believe are legal costs, is the issue I have. One, i have an email that says they will waiver any interest. Two, this new legal document they want me to sign says the amount includes interest and cost, so they have not wavered interest at all. Example of costs: 13 emails from them and 3 letters I received by post = £4,987.87. Is that reasonable?

Its not for me to decide what is reasonable. However, solicitors are not cheap and they do charge by time blocks and every email you send them adds to the bill.

I am surprised you say I can challenge them after I have signed to say I will not enter a defence. Besides s that not an admission of guilt?

The charges can be challenged if you feel they are incorrect, which is what you are suggesting. If the charges are correct then any challenge would fail.

However, I stand by you getting a local solicitor to have a look. They dont normally charge for the first meeting and they will tell you if its something they feel you have a case on or not. You will incur costs if you proceed beyond that point but if the costs are less than you save then its worth it.

moley2727

dunstonh wrote: »

Many of these guarantees had an amount specified on them or limited them to certain liabilities. Not all were open ended guarantees.



Its not for me to decide what is reasonable. However, solicitors are not cheap and they do charge by time blocks and every email you send them adds to the bill.



The charges can be challenged if you feel they are incorrect, which is what you are suggesting. If the charges are correct then any challenge would fail.

However, I stand by you getting a local solicitor to have a look. They dont normally charge for the first meeting and they will tell you if its something they feel you have a case on or not. You will incur costs if you proceed beyond that point but if the costs are less than you save then its worth it.

Thank you so much for taking the time in replying. I will make an appointment today

moley2727

Saw a solicitor this morning had to pay £100 for 30 mins!!

Not to worry. Their advise is I ask for a better breakdown of these cost charges. My original bank charge / security letter signed in 2007 does not use the word 'reasonable costs' when pursuing me to repay the debt. They also advise I ask for an explanation why I am being charged £1,300 to 'prepare court proceeding', why are they doing such work, its unnecessary in my view. I have never denied i owe this amount. This issue has always been how to schedule the repayment to them and that is what i have tried to negotiate all along.

Thanks
M

moley2727

Just a quick question please. How specific should i be in asking for further detailed breakdown of costs. For instance do i ask for the time spent on each charge with say, hourly rate, together with dates that the work was carried out? or just expect them to forward this anyhow?

Thanks

moley2727

Bump any advice??