Had a really bad day and just want to vent my anger! I took out a 17K loan with HSBC 3 years ago, at £450 per month. I have just 12 months remaining (about 6k), and times are a little tight so I decided to try and extend the length of my loan by two years, thereby reducing the payments and making life a little easier. I was told I had to apply for a new 6k loan to pay off the existing balance. So i said ok and went through the application process with the nice lady at the bank. I was turned down on the basis of I did not meet their lending criteria. I said "but I already owe you the 6k, I can just about afford the £450 per month at the moment, so I can definitely afford the £300 per month that the new loan would require", but I was met with "sorry we can't help". I feel that I am being punished for trying to be fair with the bank. Surely they can't prefer me to just turn round and say I cant afford the repayments and then default? Ridiculous.

Trading whilst insolvent in itself is not an offence. The directors have to take every step to minimise losses to creditors, and if continuing trading enables this, then the directors can quite legally continue trading. Turning the corner of insolvency may just be one deal with creditors or a new investor away.