Shortfall after sale of business premises

[Frantic50]

Hi there

I am new to this site but I really don't know where to turn at the minute. A few years a go I took out a business loan for around 140K. Due to a series of issues I had to walk away from the business which naturally left me with a considerable amount of debt that I haven't been able to pay.

 

The loan was secured against two properties (one commercial and one my home). The bank repossessed the commercial property last year and until today I have had no contact from the bank at all when today they sent me bank statements for the business loan account and my overdraft account.

 

I was absolutely shocked and now extremely worried to see that since February 2013 they have charged me £5,880 in interest on this. Also there is a deposit of 46K.

 

I haven't paid anything in so I can only assume that this money has come from the sale of the commercial property. I just don't know what to do. I have had to correspondence from the bank. Surely if they have sold the repossessed property I should have been told about it and I am disgusted as prior to repossession I had the property valued at £110K. I need to write to the bank and raise these issues as a matter of urgency, they have dealt with the whole issue very badly.

 

Can anyone please help with this. I don't know where to start or what my rights are. Can I try and regain some of the interest they have charged. Naturallly if they are going to continue to charge me over £600/month interest I'm going to get nowhere with trying to make any repayments. Also should I not have been notified about the sale - what is the normal protocol, I've never been through anything like this before and me and my family are now suffering considerably. We are now left with a shortfall of over£100K and they will be after the house next -what should I do, anyone, please???

Edited January 26, 2014 by citizenB
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[Frantic50]

Anyone, please. Really need advice. If I have posted this is the wrong place, can someone let me know where might be better.

[citizenB]

Apologies, you do appear to have been missed. I will bring your thread to the attention of site team.

[citizenB]

I would have thought they would have let you know that the house had been sold and how they are progressing with any shortfall.

 

I have posted 2 x links for letters so you can establish how they have arrived at the figure they are claiming. I suggest you read them both, see which one is most applicable for your requirements. Amend if required.

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?390014-Mortgage-Shortfalls-Subject-Access-Request

 

^^^^ This first one is for a subject access request - you will need to enclose £10.00 with the request and they have 40 calendar days in which to respond with the data.

 

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?387500-Mortgage-shortfalls-Request-Breakdown-of-balance-owed

 

^^^ This 2nd letter is I think used when a claim has been issued and you are making a request for information in order to help you defend the claim. However, suitably amended it could just be a general request - however I would head it FORMAL COMPLAINT.

 

Which ever letter you choose should go to their Head / Registered office and at the very least send it by way of Recorded Delivery Mail.

 

I have left a message for others on the site team who have more experience in this situation.

[citizenB]

Were you a limited company ?

[Conniff]

The sale of assets must be done in a fair way and not just accept the first offer, so you need to ask them how much they sold the building for and if it is 46k but worth on the market a lot more, you can something done about this. I can't remember where I read it, but will try and find it.

[Frantic50]

Thanks for all the advice so far. Really appreciate it.

 

 

Citizen B - no I was not a Ltd Co. a sole trader. Thanks for the template letters. I have spent most of today putting a letter together that I will send recorded delivery tomorrow.

 

 

Conniff - thanks for that, any further information, much appreciated.

 

 

Does anyone know what the situation is with regarding to the interest they are charging. Anything I may be able to pay towards this debt in the future will not exceed the amount of interest they are charging me !!

[slick132]

Hi Frantic and welcome to CAG

 

I don't know what your financial circumstances are but this may be of interest and/or relevant - http://www.consumeractiongroup.co.uk/forum/showthread.php?387436-Letter-for-consideration-regarding-Hardship-or-Financial-Difficulty

 

Can you say what bank is involved.

 

[Frantic50]

Slick - It's Lloyds

[Frantic50]

Citizen B

 

Just been looking at the templates again - great stuff and getting one sent off now. Just a couple of quick questions if I may.

 

1. What if I receive any further communications from the bank before the 40 days. Can I just respond and say it is in dispute ?

 

2. Once I have received the information requested, what do I do with it ? Sorry to seem a bit dim, but can I assume that they are unlikely to be able to provide all the information requested in the first letter. In which case, what do I do then ?

 

Thanks for all your help, it really is appreciated, this whole thing is having a massive impact on my wife and family. This experience has been hellish. You try and do the best for your family and sometimes it just turns out to have been the worse decision I ever made !

 

 

Cheers

[slick132]

Hi Frantic,

 

1. The bank could start collection activity at any time for what they allege you owe and the SAR may put matters in dispute and buy you some time.

 

2. The info you get back should be considerable and include whatever info the bank holds about you (as an individual). Whatever they provide can be used to see what has happened so far, and what further info you require to see that you've been treated fairly, or not. For example, you may find out what was involved in the process of the sale of the property, who sold it, who bought it, etc.

 

Was your business a named entity or maybe "Frantic50 t/a My Business".

 

The SAR may not be entirely successful as it's a formal request for personal data held by the bank about you. They may not supply all data about the business. However, you have to start somewhere, so get the SAR off asap.

 

If you believe the property was sold too cheaply, the bank may have failed in it's duty to take reasonable steps to realise the best price for the property. This will not be easy to prove but you'll have to do your best. In this regard, find out as much as you can the purchaser, the agent who sold it, the manner in which it was marketed, etc.

 

[Lea_HTH]

The OP was a sole trader, so he/she and the business are one and the same legal entity - there is no 'the business' and 'the OP' legally - the bank will have to provide all the information they hold.

 

If the OP had been the director of a limited company - the limitations on what he/she owes would have been covered by the fact that the Ltd Co. and he/she being two seperate legal entities (save as to any director guarantees given).

[Frantic50]

Just to keep you all posted. I have now sent off a letter of complaint to Lloyds complaints department detailing all the issues I have. There are many more than I have mentioned on here ! I have also written to the CEO and Chairman (I know it want make any difference, but it certainly made me feel better). I have also sent a SAR and a letter to try and get the interest stopped/refunded due to financial hardship.

 

I will await their response and post an update as and when. Thanks for everyone who responded, really helpful. Thanks

[Frantic50]

Hi

I have today received a response from Lloyds. They have answered all the issues I raised but not to my satisfaction. They have completely hedged the question concerning the low price they sold the property for and have told me to speak to the LPA they appointed about it. Surely they should take responsibility for it. It was them that appointed them! Also, they will not stop the interest they are charging and, to be honest, the tone of the letter is - you agreed to secure the loan against your property and you signed the appropriate forms to say you agreed therefore we are going to take your house! I really don't know what to do next. I am so angry, how can they sell a property worth £99K for £46K thus leaving me with an enormous short fall !! Should I go to the FOS and state all the issues that Lloyds have not answered satisfactorily. Can anyone advice of any other steps I can take regarding the interest. So far they have charged me nearly £6K in 12 months. How am I ever going to be able to pay anything off this debt when they are charging so much. Once again, any help, pleeaaasssee. Things are just going from bad to worse and all I can see in the future is me and my kids out on the street homeless.

[f16]

Frantic50. I know the position you are in only too well. Have you been back to your old unit to ask the new owner who marketed the property?

How he heard about it and a long shot..... but what he paid?

[Frantic50]

No, due to distance, we are the other side of the country to where we had the premises. If we were nearer it would definitely be worth a visit I think. The whole thing stinks.

[slick132]

I assume they will respond to your SAR within the prescribed 40 days but did they say anything about it in the reply.

 

[Frantic50]

Hi Slick

Yes they did. They acknowledged the SAR request and said it would be dealt with separately by a different department. The letter also said that they would not be able to provide all the information I requested (I sent the template letter that requested info about the sale i.e.how the low selling figure was arrived at, how they marketed the property etc etc). Lloyds are saying that they will not be able to answer these questions as they fall within the remit of the LPA. The letter goes on to say that "although the bank appoints the LPA they do not act on our behalf and we are unable to influence their actions or their process". They go on to say that if we are unhappy I need to address the complaint to them and not Lloyds !!!???

 

Really don't know what to do next. Do I now send a SAR to the LPA ? Do I go back to Lloyds ? Do I go the FOS ? I can't believe they can get away with this. All they have done is doubled my debt. In my letter I asked them to stop adding interest and they have just said that they are entitled to add it and that they will continue to do so until the debt is paid. Well that will be never, especially as they are adding nearly £6K a year in interest.

 

Cheers everyone.

[slick132]

Hi Frantic,

 

I don't think a SAR to the LPA Receiver is worth doing. A SAR is a request for data that a body holds about you and the LPAR would probably only have to confirm your details as shown on the Land Registry.

 

Sounds like the bank are trying to shirk their responsibilities by telling you to contact the LPAR. The bank is ultimately responsible for what was done and they should be accountable.

 

However, I think you must be realistic about what you can do in this situation. Although the bank had a duty to raise the best price they could during the sale process, they (or the selling agent) may have taken actions which are regarded as adequate.

 

Have you found out yet who the ppty was sold to. Land Registry should have the info, so you can check the deal was carried out "at arm's length" and not to a business connected with the bank and or the LPAR.

 

Have you spoken to National Debtline or Busines Debtline for support and advice.

 

[Frantic50]

Hi Slick

 

Just a quick update. I have checked the Land Registry and the property is still showing up in my name. I spoke to them on the phone and they said that it isn't normal to take so long for the ownership to be changed so not sure what's going on there.

 

I have been on the phone constantly this week with different agencies - CAB, National Debtline etc etc and it has been recommended to me that I write to Lloyds again and say that I have a right to know why the property was sold at approx. 50% of the market value. I have since found out (via a neighbour at the old premises) that it was actually sold at auction and I have also been advised to ask Lloyds why they only marketed it for 2.5 months before deciding to go to auction. I've put all this in another letter to Lloyds so see what happens. I've also written to the FOS about it.

 

The nightmare goes on !! I'll keep you updated.

[slick132]

Hi Frantic,

 

I'm afraid that, if the ppty was sold at auction, you may have real trouble proving any improper behaviour by the bank.

 

They are not necessarily obliged to keep the ppty on with estate agents indefinitely and the auction would be seen as an acceptable sale method.

 

[Frantic50]

The sale of assets must be done in a fair way and not just accept the first offer, so you need to ask them how much they sold the building for and if it is 46k but worth on the market a lot more, you can something done about this. I can't remember where I read it, but will try and find it.

 

Hi Conniff. Did you manage to find anything out about this ?

[Frantic50]

Hi Frantic,

 

I'm afraid that, if the ppty was sold at auction, you may have real trouble proving any improper behaviour by the bank.

 

They are not necessarily obliged to keep the ppty on with estate agents indefinitely and the auction would be seen as an acceptable sale method.

 

 

Yes, I thought that Slick. As it is beginning to look like we will loose the house as well as everything else I have been talking to the housing people at my local council. Their legal man said that going to auction after only three months hasn't given it enough time and that I should write again. So I have now written again to Lloyds demanding answers to the specific questions concerning the sale of the property and asking why it was decided to sell at auction so quickly. I have also sent a letter to the FOS.

Some days I just want to throw the towel in and except what I think will inevitably happen this whole thing is having a massive impact on family life so today I want to fight and do everything I can to keep things together.

By the way, Lloyds 40 days to respond to the SAR is up on Saturday. What do I do if nothing arrives ? Is their a process to put into action.

 

Thanks everyone.

[slick132]

Hi Frantic,

 

Let us know when you hear from the bank or the FOS. Please note the FOS may not involve themselves until you've exhausted complaint procedures with the bank.

 

See the Library, DPA section, Failure to Comply letter, if the bank fails to reply to your SAR by 40 days.

 

If in doubt, shout.

 

[Frantic50]

Hi there

 

I think we've done just about we can with the Bank now. Last letter said -'Final Response'! I will continue to SHOUT !!!!!!!!

 

Many thanks:madgrin: