business debt to food provider. threats of bancruptcy now a charge on house - CAN THEY DO BOTH?

[scousebird]

the debt is not disputed. it was approx £3400 balance of a business debit with a food provider.

their dca 'offered' a payment plan of £500pm or bancruptcy, which i managed for 2 months even though i explained the business was closing and i had no income - not even for my priority debts. i then asked for a lower plan of 100pm but they wanted more 250, but took 200, so again i limped along. not paying any off the other business debts as they werent chasing or threatening bankruptcy!

 

i have not made payment for the last 2 months, so the other day received dca letter of impending bankruptcy proceedings for the balance of £1654.67 [this includes late payment and interest to date of £240].

 

i have now received an email from the Food provider directly, saying they have exhausted avenues etc etc; and notice i have a property registered in my name.

 

so my question is this....

if they force bankruptcy, presumably they cant have a charge on the house - as it will have to be sold?

plus if they do force their debit, at 1600 is a small drop compared to the other creditors in excess of 11k utilities and 10k business rates, so they would lose out in the % in the £ ratio.

 

if they go for the charge - INSTEAD of bankruptcy - can i ask for a non-interest bearing charge?

 

thoughts and advice welcome please. i am going to reply to the FOOD supplier first as i hope their email is a sniffing around for a better option that forcing bankruptcy etc.

 

thanks.

[citizenB]

There is little point in threatenting Bankruptcy AND a charge on the house ?

 

Bankruptcy would leave them in the unenviable position of being very low down on the food chain.

 

Registering a charge on your property would give them some security, although not much if you have previous secured lenders eg mortgage, loans etc.. who would have greater priority than them.

 

It sounds to me as though they are being pretty foolish in not accepting a recoverable but smaller repayment plan.

 

Have you spoken to somewhere like National Debtline - who now have a dedicated Business section ?

[scousebird]

thank you Citizen B.

you are seeing the overall picture with the same eyes as me !

 

i have bitten the bullet and emailed the Food company back and stated the basics:

• i made payments to them at the detriment of my own priority debts, plus to the prejudice of other creditors - as you say higher up in the food chain.
  
• i made them aware i was struggling financially and that the payment plan was still of a higher value that i could afford.
  
• i now have debts private and business; i listed these with respective values - stressing those with priority ie; Business Rates, HMRC, mortgage and house rates, plus all my others.
  
• suggested that forcing the sale, when there is already a 2nd charge/divorce settlement in place will leave not much in the pot, especially when they are so low down in percentage to £ averaging out of creditors.
  
• made them aware of my limited income due to exacerbated health condition and doctor signing me off sick.
  
• suggested that a freeze of the account; no interest/legal charges for a 12 month period @ £1pm with a review.
  

I really cant do any more than that. I have stressed that I have almost halved the debt at the expense of priority creditors.

hopefully my health and financial position in 12 months will be better and we can then look to reviewing the account.

 

i have been in touch with national debtline etc; it has just been a very rocky 6 months and i find myself sinking quicker than i can paddle at the moment.

TBH i am at the point now of saying having the house etc etc; mentally now i have just about gone past caring - i have the knowledge to perhaps be able to write and negotiate with them all and take the pressure off, but i have no energy left. sure i am not the only one who feels like that/this.

[citizenB]

I have flagged your thread for other members of site team with more knowledge to comment.. I am sure they will look in when they clock off from their day jobs

 

It is my opinion that if this company were to be so foolish as to not accept a reasonable offer of repayment - they will not be looked on too kindly in any court.. you have, I think made reasonable suggestions to move forward.

 

Are you able to name the DCA ? These sometimes exceed their authority and if they dont own the debt and are purely acting as collection agents - then the threats they have made regarding Bankruptcy etc, are simply that.. threats. Only the owner/original creditor can take those steps.

[scousebird]

i would rather not name the DCA as it is an in-house team; and i am happy [questionable word] that the Food company still own the debt.

the DCA letterhead also shows it as a reg co in england; and the recoveries division of xxxx ltd.

 

i appreciate your comments and advice.

i think in my own mind it seemed stupid to threaten bancruptcy [via a formal letter] then received an email saying that they note i have a property and could commence with a registered charge [via informal email 6 days later]. to me its either/or; not both.

obvously a charge, so long as non interest accruing just holds the debt - until i ever sell [been here 20+yrs so not in a hurry, if i can sort my mortgage arrears out at least!]. at least it takes off the pressure of dca chasing.

i am not disputing i owe the money; i have made attempts to keep to a repayment plan; i am now asking for a formal freeze for 12 months and then a review.

they have nothing to lose [well thats my opinion at least!!]

 

fingers crossed.

[citizenB]

Oh dear, they really are breaching OFT guidelines arent they ?

 

They would actually have to issue a claim or Stat demand .. first.. then they would have to obtain judgment.. then you would have to default on that judgment for them to be able to do any of what they are claiming they can do.

 

If this were me, I would be writing to the Food Company outlining your proposals. By doing this, you are most certainly laying a paper trail and protecting yourself.. just in case they do decide to be silly and issue a claim. If they did, then it would almost certainly be heard in a small claims court and you would then be able to prove that you have done your very best to come to an arrangement and all they have done is permit their 3rd party agency to issue threats.

[scousebird]

well i have now heard back.

i copied the email into the original file handler whose letter i had received the previous week, saying i wanted her to have full information for her file and that i hadnt heard from the new colleague who had sent the email chaser.

suffice to say within about 2 hours i got an email reply from the new handler. they say "they appreciate my current situation but couldnt accept £1pm, but could take a minimum of £100pm"

seems ironic if they had allowed me this option when i asked for it - i may have been able to limp along with them for a bit longer till i got myself sorted out [hopefully].

well unfortunately they cant get blood out of a stone [esp; when the stone is empty and crushed dry].

so - how do i answer them.

do i just state categorically i cant afford it [which i seriously cant, not just a bluffing tactic].

do i reiterate my £1pm offer.

say see them in court? etc etc

they are the only one, so far, pressing bankruptcy - hence why i wanted to try to keep them sweet.

 

thanks in advance for replies...

[citizenB]

In the grand scheme of things and taking your priority debts out of the equasion.. where does this company stand in line regarding your non secured debts ?

[scousebird]

i have made them aware that even after removing priority debts - they would be very low down in the % per £ share out if pushed to bancruptcy.

as an example; business rates £10k+; business gas/elec £10k; outstanding lease £4,500. then private debts, house rates, mortgage; 2nd charge for a divorce settlement.

[citizenB]

I am all out of ideas. What did National Debtline suggest ?

[citizenB]

One question has been asked - on what basis is the company adding interest and fees - is there a clause in any contract you have with them for this ?