Dissolved company what will the bank do

[Outadebt]

Hi

I run running a Ltd business which stopped trading over a year back with an ODraft of some 14k with PG by me. I have had almost zero contact from the bank in this time other than a 'letter of concern' last August, since then nothing. The business was finally dissolved in October last year so on to my question.

What should or will Lloyds do next, some 6 months after being dissolved, nothing other than monthly interest continuing to mount up, now close to 16k. Are they legally bound to do anything in this situation? I am also in a bad way with same bank personally (both accounts are dealt with by same business acct manager) so they would be able to see the full picture and the cynic in me wonders if they are waiting to see improvement in personal situation before doing anything on the business side, can they do this? are there any time limits?

Help appreciated.

[BankFodder]

If you have given a personal guarantee, they will come after you. The limit is 6 years

[BankFodder]

That means 6 years from the time they try to invoke the guarantee and you breach it

[Outadebt]

ok thanks, so they can do nothing and let the interest accrue then when they they think I am better able to pay they can choose at that time to start the process. Not sure that is fair but that's life!

[andrew1]

ok thanks, so they can do nothing and let the interest accrue then when they they think I am better able to pay they can choose at that time to start the process. Not sure that is fair but that's life!

 

I know where you are at having done this myself. Now don't feel I'm on the banks side here, people who know me will know better, but when you guaranteed this overdraft the bank had lent the monies and you obviously felt confident enough to put your guarantee in place to cover it if all went belly-up. So unfair?....is that quite the word? Maybe not.

 

That said, there are remedies, but banks will come back and will take all your circumstances into account. i.e: do you have assets..they can check the value of your property +/- on-line and through your credit files as to your mortgage without referring to you so they'll know more or less what you're worth. Asset is one thing, cash-flow another, so they wait if they see you are in short term trouble, but have assets. If you have no assets and rent for example, that changes the dynamics somewhat when negotiating any settlements.

 

Now the size of this is, with respect, relatively small in loans and o/d terms so it is a manageable amount if you look at it from their perspective so you have to decide quite how you want to manage this against what their options are. ie. sit in the banks shoes for a second and look at it from their side.

 

Once these 'debts' have been passed to the Debt Management department of the bank from the branch that's when you get into negotiating territory.

 

What I would suggest is that you ask the account holder what the balance being asked is made up of, whether there are many charges (I know business charges are not the same as consumer, but they are a slight bargaining tool when the time comes. How much is interest and so on. Break it down because there will come a time when you will need to make an arrangement to repay this if you are to avoid charging orders (if you own assets) or even personal bankruptcy. Once you have agreed a figure owed with the bank then you need to set up some repayment schedule. They may sell the debt to a DCA, but you'd be better off trying to make an arrangement with the bank although you can play with DCA's for a while, some can get nasty. It buys you time playing with them that's all and you may be able to get full and final settlements of about 50-60% on average. You may also be able to get that from the bank, but you would need to be in funds to do that.

 

Before I waffle on any further let us know the circumstances and maybe we can talk you through this step by step. I've done this myself a while ago, but you can do it and get a reasonable deal, but you just need a little patience and the application to negotiate over a period of time. If cash-flow's the problem then the longer term arrangement is best.

 

Good luck anyway.

[Outadebt]

Hi andrew1

 

Thanks for the post, and your right about the unfair bit and I am not trying to get out of paying, you borrow based upon fact at the time and expectation of the future - sadly this did not happen and I am left in financial ruin for many years - which is fine, all part of life. What feels unfair is the fact the ltd business is no more yet they appear to be doing nothing waiting to see if I improve my financial statyus sufficiently to then demand payment. As it is because my persoanl side is also with them and very messy they can see this will take some time. So I guess it is sit back and wait or is it worth me making the contact to see what the state of play is? as it stands there is no room for me to make an offer or even a monthly payment as I pay every penny on personal debt and living essentials.

 

Thanks anyway.

[andrew1]

Hi andrew1

 

Thanks for the post, and your right about the unfair bit and I am not trying to get out of paying, you borrow based upon fact at the time and expectation of the future - sadly this did not happen and I am left in financial ruin for many years - which is fine, all part of life. What feels unfair is the fact the ltd business is no more yet they appear to be doing nothing waiting to see if I improve my financial status sufficiently to then demand payment. As it is because my personal side is also with them and very messy they can see this will take some time. So I guess it is sit back and wait or is it worth me making the contact to see what the state of play is? as it stands there is no room for me to make an offer or even a monthly payment as I pay every penny on personal debt and living essentials.

 

Thanks anyway.

 

Again, you don't say what your circumstances are with regards to assets. If you have a mortgage with Lloyds for example then they have you under their control. Can you tell us what hold they have on you?

 

There's always the option, if they know your circumstances, of asking if the Interest can be frozen for a period of time, at least that freezes the rot. If they know you would like to find a solution then it's better than just leaving it alone to fester and grow. When the day of reckoning comes it'll invariably be at a time that is not convenient to you or just when you thought you'd got back on your feet.

 

I'd also try and set yourself up with another account somewhere so you begin to create options for yourself. What Bankfodder will recognise I'm sure when we all talked about parachute accounts when banks came nasty over claims for bank charges. Always handy to have another account for your income so it is not stripped off you the minute you get it.

 

Anyway, one step at a time, tell us the structure of your position with the bank and maybe there's a way through this you hadn't thought of or tried.

 

With all the experience coming through this forum, there's always someone who has been through what you have and they have found a way through.