HSBC Bounce back loan

[SHELBELLE]

Hi

My husband took out a HSBC BBL in the pandemic as a sole trader. Hasn't made any payments, and now it's been passed to a DCA.

I need a bit of guidance...I have read it is best to ignore the DCA, unless they provide a NOA. I did actually contact them with a CCA request.

Is it best to contact the bank and make a token payment of what is affordable.

I also undertstand that these loans are unenforceable, but as a sole trader you will still be liable. To what extent will that be?

If these are government backed loans, how far is the bank like to take this?

Any advice greatly appreciated.

Many thanks.

[Andyorch]

Topic moved tot he appropriate forum.

 

Some information which may assist.

Quote

If you are unable to repay your Bounce Back Loan, the PAYG scheme may be able to assist you: The option to postpone repayments for six months. This is in addition to the first-year payment holiday you received when you took out the Bounce Back Loan as at 26 May 2023

Quote

How long to pay off bounce back loan?

Extend your loan term Extend your loan from the standard six years to ten years. This will reduce your monthly repayments, but the total interest you pay will increase and you'll have to repay a larger amount overall. Make interest-only repaymentsPay just the loan interest for six months.

Quote

Does BBLs affect credit score?

No significant repercussions exist if you default to repay your BBL. You won't lose any assets, and it will not directly affect your credit score. In the first place, credit checks are not mandatory for application to the loan scheme.

Quote

Am I personally liable for BBL?

Providing that directors acted reasonably and responsibly and used the Bounce Back Loan for the economic benefit of the business, there is no risk that you will be personally liable for the loan if the company cannot pay it back.

 

[SHELBELLE]

Hi Andyorch

 

Thanks for your response. Would that all apply to a Sole Trader?

 

[SHELBELLE]

Having had a read on here, I am looking at worse case scenario, what if you cannot afford to pay as much as the interest back. 
Is the situation the same for Ltd and Sole Traders?

Any advice greatly appreciated.

I am thinking that the first step would be to contact the bank and not the DCA. 

[dx100uk]

you IGNORE any DCA!!!

no harm in talking to the bank no.

 

[SHELBELLE]

Thanks DX

Are you aware if Sole Trader is more liable than a Ltd Company?

[Andyorch]

https://www.realbusinessrescue.co.uk/bounce-back-loan-support/i-cannot-afford-to-repay-my-sole-trader-bounce-back-loan

 

[dx100uk]

As a sole trader, there’s no legal separation between your personal finances and the finances of your business, so if the business can’t repay the loan, you become personally liable for the debt. 

While you can be made personally liable for a Bounce Back Loan, according to the British Business Bank, which delivered the BBLS on behalf of the government, recovery action cannot be taken against your main residence or main personal vehicle - so your house and car are safe. However, other personal assets can be recovered to repay the debt and the lender could even apply to make you bankrupt. 

great link...but we are not saying use the co.!! 

they'll charge you admin fees so deal with it yourself...easy!!