RBS/NatWest - want to consolidate an overdraft into a loan - mmm?

[andrew1]

I'm thinking aloud here, I find it easier to think things through when I write them down - where better than CAG to do that? .... I would appreciate any thoughts on this situation :

 

 

My friend in Southend has a Ltd company which is about to be struck off as it's not been trading..it has however a 35k overdraft secured by a Directors guarantee - (1 director-him!). It's unlikely to be liquidated as such.

 

He has kept talking to the bank although they know there's no activity on the account as he has tried to keep the inevitable happening when they call in the Overdraft. To date he's just been paying the odd bit towards the interest.

 

The manager has stated that if he paid the interest or some of it he could stop it going to collections in Telford and an agreement was made over the phone to pay this interest for 3 months. He was told the paperwork would be sent to set this up, but what came back was a loan agreement consolidating the whole account into one lump sum.

 

My gut instinct is to say " stick with the overdraft, let it go to Telford and let nature take it's course and you can negotiate some kind of settlement with them once you have haggled on the horrendous amount of charges that they are absorbing too". Once that's done at least he'll be able to get to a figure and negotiate a full and final and terms to pay it when the day arrives.

 

If he takes the loan for this 35k, he will have 3 months with the lower payments of interest, then he'll be faced with loan repayments I know he can't make. His business has failed and he is older and unlikely to earn like he did, he struggles with his mortgage and he's fighting another loan which the court have granted a suspended possession order on so taking a 35k loan would be totally irresponsible of both the bank to give and he to take on.

 

As this is just a Directors guarantee he hasn't (for once in his life) involved his wife who is a party to their property which is joint names so if the OD was called in and his Dir Guarantee was called at least he has a limited exposure.

 

What I am trying to guage is how hard Telford are, what flexibility there might be/negotiability they have or how many of these agreements have been found to be faulty? Anyone have any loan agreements/Directors guarantees for businesses with RBS/NatWest which are full of holes I can guide him with or any similar expereinces where I can get a feel for how to handle this? Also, anyone negotiated down their charges for businesses on delinquent accounts?

 

Thanks....

[steven4064]

I've no idea about Telford but I think your gut instinct is right about the loan.

 

Are there any unlawful charges in this overdraft?

[andrew1]

I've no idea about Telford but I think your gut instinct is right about the loan.

 

Are there any unlawful charges in this overdraft?

 

Loads, but it's a Ltd Company account Steven

[steven4064]

I've sent you a PM

[andrew1]

Thanks Steven.