Start Up Loans Default

[Fresh Start]

Hi everyone! About a year ago I took a £12,000 government sponsored business startup loan.

 

My business didn't work out, and

 

now I'm not in a position to pay back this loan.

 

I wonder if anyone has had any experience dealing with these people before.

 

I'm currently 2 months without payments, they say with one more month my debt will default.

 

I was thinking about offering a self set up Debt Managment Plan,

or perhaps offering a small percentage of the total amount as a final settlement.

 

Love to hear your thoughts.

[stu007]

Hi Fresh Start

 

A Warm Welcome to CAG

 

Please be patient I am sure the caggers will be along to offer you some good advice

[Fresh Start]

Thanks Stu. I've heard this scheme was designed with lots of defaults in mind. I'm sure there must be an elegant way through this.

[maroondevo52]

Hi,

 

How long do you have to pay this loan.

 

A Start Up Loan is a personal loan and therefore still remains payable in the event a business ceases trading. In general all loan providers follow standard market practice when loan repayments are missed and take a fair and reasonable approach.

 

When a loan recipient fails to make a payment, contact is attempted to try and determine the reasons for the payment being missed. This is then followed up by an email and or letter stating that a repayment(s) has been missed and what they should do to remedy the situation. If a loan recipient is having difficulty in meeting their loan obligations they should inform their loan provider as soon as possible.

 

The loan provider will then try and work with the loan recipient to come to a reasonable and fair outcome to ensure they continue to meet their loan obligations. If a loan recipient fails to respond to attempts to contact them with respect to their missed loan repayments, a loan provider may then look to recover the outstanding payments through various means such as, but not limited to, issuing a CCJ or they may be referred to an approved Debt Collection Agent.

[Fresh Start]

Thanks for the great information. OK, so potentially the best thing for me to do would be to explain my lack of income, then set up a small monthly repayment.

 

It would be nice to clear the debt in one go. I wonder if a lower % Full and final payment would work?

[Fresh Start]

OK, so I've done a lot of research over the last 3 days and I'm ready to tackle my startup loan. I'm going to offer them a self managed DMP at £10 / month on the basis of a personal budget statement I'll have with me when I propose it. However, I will also say that my parents have offered me £2,000 for a full and final clearing of the debt if that's what they would prefer. (Do comment if you think this a bad move)

 

The loan itself is £12,000

 

I'll report back and share what I've learned, that way other people may benefit from this experiment.

[maroondevo52]

Hi Fresh Start,

 

I have merged your threads, best keep everything regarding this issue on the one thread.

 

Regards,

 

Scott.

[renegadeimp]

Very doubtful they'll accept 2k as a f&f. If they do then you need to make sure its specifically worded.

[Fresh Start]

So just got off the phone for the first round. Here's what happened. I offered £2k F&F, they said it was too low (You were right Renegade Imp!) They actually said they would only accept offers of more than 50%.

 

They said they wanted to do a 'partial settlement' instead of a F&F, which they said means they will stop bothering me and consider the debt written off. Still £2K is too low.

 

They then proposed that I do a 'repayment proposal' where i open up the last 3 months of bank accounts to them and submit a budget, then they would freeze the interest rate and accept a lower payment. (sounds like a rubbish version of a DMP to me??)

 

I proposed a DMP, and said my (free) DMA would be in touch. They put my account 'on hold' for 30 days, which only means they won't bother me, but interest is still being added.

 

Hope that's useful. Would love to hear your feedback

Edited August 21, 2014 by Fresh Start
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