Barclays Biz Loan Out Control

[HP Mum]

Very silly situation.

Years ago had a good business, took out a loan to help grow, but down the line a big client failed to pay and the business suffered and closed.

The loan - unfortunately - was secured against property.

And even more unfortunately the interest rate was super high - almost 8% above base.

 

 

To cut to the chase - 7 years have passed and I paid hardly anything - because I was simply surviving not earning enough to pay a huge monthly amount.

Barclays never sent any statements.

The original amount has just grown and grown.

And Barclays haven't recalled the debt as it is secured against the property.

 

 

I now find myself in a situation where the original debt has increased by 50%.

 

 

I am not working.

The property concerned is a semi-rental but the rentals only just about cover the mortgage - there is nothing much spare.

 

 

I would like to clear this ever increasing debt. It was huge 7 years ago; it is humungous now.

I just don't know how to go about beginning to discuss the situation with them.

I have tried.

They initially said they would be open to some kind of settlement, but not below where it stood 12 months ago.

I was kind of wanting to re-finance with someone else at a better rate.

With rates at .5% I was thinking that may be possible.

But to even agree to any kind of debt clearance they want financial statements filled in etc

And I don't even want to go down that route as my mortgage is with Barclays (Wlwich) too. And I don't want them to get nervous about the property security...

In preliminary discussions they said they would want to discuss the mortgage with W.... especially if there was a problem paying the mortgage

 

 

I am considering re-mortgaging with a different lender to clear both debts - so really don't want any negative vibes from Barclays or W.

 

 

I probably sound very vague, but am always unsure if Barc reads these forums so I don't want to say too much in case....

 

 

Any advice on how to deal with this.

I am so stressed by it.

[HP Mum]

I would like to sell the property.

But I do need to get pass this hurdle first.

[HP Mum]

Another alternative is that, following close bereavement, there may be some money that could clear the debt...

If Barclays are open to discuss / negotiate.

[slick132]

Hi Mum,

 

Can you confirm approx the initial loan amount and the current balance (if known).

 

Am I right in thinking this is not secured against your home, which is mortgaged with Woolwich.

 

If you sold the ppty on which the loan is secured, is there not sufficient equity to clear the loan.

 

[HP Mum]

Morning Slick

 

 

Just gone through my file:

 

 

The Barc Biz Loan was actually an o/d facility. It is quite a frightening amount, unfortunately...

The loan is secured against the one property I own - which is rented - and on a W mortgage.

 

 

Taken out in 05.

The original o/d facility was for 45k, on a 6.05% pa above base.

 

 

End 06, the o/d facility was increased to £50k for 3m before a review scheduled.

Interest rate was increased to 6.5% above base.

Clause stated that upon expiry the o/d facility would reduce back to 45k

 

 

Start 07 - the o/d facility was changed to a loan with a higher facility level of £85k.

They changed the interest rate to 7.6% above base.

 

 

My business had problems end 08. The amount owing on the loan was apx 65k.

 

 

Lots of communication and some payments to offset were made.

By end 09 I asked Barc to simply add the loan on to the main mortgage held by W. Considering the same bank.

But W refused to consolidate the loan for business reasons.

So frustrating as my mortgage is on such a low interest %...

Another 5 years gone by with no payments and simply huge interest annually.

Meaning loan balance has almost doubled from original o/d facility in 05...

 

 

I could sell the property to clear the loan. In fact I want to.

However, I can not sell the property yet due to complicated legal reasons...

First, I need to sort out this loan and try and fix a good level to repay.

 

Not sure if this helps??

I am really quite frightened at the level of the loan now...

[HP Mum]

Just trying to ignite this thread again.

 

 

This biz loan is secured against the property.

And has a super high interest rate.

 

 

is there anything I can write to Barclays to appeal the high interest rate and get them to reduce the balance ?????

From initial verbal contact they were very aggressive and not prepared to discuss at all.

Is there anything I could write to appeal to better nature?

(hmmmm)

[slick132]

Hi Mum,

 

Without going into detail that you don't want to, can you say when you might be past the hurdle that is currently stopping you selling the ppty.

 

[HP Mum]

Sorry for the slow response.

 

 

I can't sell the property until this 2nd charge is cleared.

I need to re-finance to make the property properly saleable and no lender will offer lending as a 3rd charge. As a 1st or 2nd charge they would. I have been looking into this for the last 3 months.

 

 

I wrote to them last month asking them what they would accept as a F&F offer.

They wrote back pretty quickly asking for all sorts of financial info, tax returns, proof of income etc etc. They also said they would discuss a settlement.

I was in the process of putting all the info together and then I get another letter, within days of the first letter, making demands and threatening solicitors and enforcing a sale.... The same person too.

I was shocked as I had initiated contact advising I want to settle and clear very soon.

Clearly they are trying to intimidate me.

I have written back to them saying there is no need for appointing expensive lawyers etc and that I simply want to have the lowest figure they will accept - especially given the huge interest rates they have charged whilst actual rates are so low...

 

 

I guess what I really am asking here - is what could I try to push for as a settlement?

From outset at 45k to now, 10y later, a whopping 100k.

It is such a huge amount.

 

 

I am so furious that this has happened. If they had let me add it to my mortgage I would not have had this issue of a 2nd charge at an extortionate rate....

 

 

Any advice is welcome....

[HP Mum]

Well.... An update.

This is not settled with a settlement agreement from the bank - but I did - somehow - manage to re-finance and have cleared this old loan.

This is a weight (in a sense) off my shoulders.

 

 

However - In retrospect / hindsight - I would like to complain against Barc's hugely punitive % interest rate whilst there has been so many years of tiny interest % rate - and ask them some kind of refund.

It would be great to think that I could write some kind of complaint letter criticising their behaviour and how much money they have earned out of someone vulnerable....

Has anyone ever had success following this route?

 

 

Be good to know.

[slick132]

Hi Mum and I'm pleased to hear you've managed to refinance at a less punitive rate.

 

I don't think you have a hope of getting any sort of result complaining in the manner you say. I know it's not fair that you suffered high interest rates when they've been at an all-time low but I don't think there would be any redress for you.

 

Maybe others may comment with other advice and prove me wrong, but I wouldn't hold my breath !!