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Original poster

Desperate situation. Please help.

28 replies

lessthan9lives · 09/06/2012 11:17

Disclaimer: I haven't name changed and this thread completely outs me. Mum or dad if you read this I am only trying to help I am as desperate as you are.

Right. DF owned his own company. About two weeks ago he went into receivership. All the assets are being sold but there isn't nearly enough to cover the debts. In a fit of desperation some time ago to try and turn things around DF signed a personal loan agreement. The company it's self was limited but this loan wasn't. None of us knew that he had done this. DM and DF own their own modest house in joint names.

Is it right that the bank can fource the sale of the house and take my dads share because he signed the personal agreement?

Is there any way to prevent this if this is the case? DF did it without telling anyone because he despirstely wanted to save the company and peoples jobs. There was an element of miss sale on the part of the bank.

DF and DM have lost everything. I know everyone works hard but DF has been doing 7am-8/9pm almost every day of my thirty year life. They don't even have a pension because the premises of the business was their 'nest egg'. I really want to save their home.

Thank you for getting this far. Any advice would be much appreciated.

X lessthan.

OP posts:
RockChick1984 · 09/06/2012 11:43

I'm not a lawyer, so really not an expert, am ex-bank staff so have knowledge of the financial side but not the legalities of receivership. Was it an unsecured personal loan, or secured on the house? Generally (apart from extreme circumstances) if unsecured the bank can make no claim on the property, however if it's a secured loan then they will have a charge on the home. How much was the loan for? This can also make a difference.

Hopefully someone with more knowledge will be along soon.

Original poster
lessthan9lives · 09/06/2012 11:57

Thanks RockChick the loan was for more than £100,000 and the house was not specifically mentioned as far as I'm aware.

OP posts:
RockChick1984 · 09/06/2012 12:23

For the amount of the loan, I would presume he has taken it secured on something, most commonly property. If he has taken it secured on the business premises, I'm not sure about the legalities of it as that would also presumably be going towards the receivership.

Unfortunately if he has secured it on his home, it's basically a mortgage so yes if he defaults on it, then the bank can repossess the house. Most banks now will not repossess until 6 payments have been missed, but he needs to contact them as soon as possible if he wants any leniency with them. Is there no way of him meeting the payments / your mum paying it?

Sonnet · 09/06/2012 12:28

I can't add anything to help but just wanted to say i am thinking of you as my inlaws were in a similar position 18 years ago.

Sonnet · 09/06/2012 12:30

I also think it must be a secured loan. Does he have any other assets?

Original poster
lessthan9lives · 09/06/2012 12:58

No other assets Sonnet other than a washing machine, fridge, etc. The car and mobile phone belonged to the company. So this really is as bad as it seams Sad

OP posts:
Sonnet · 09/06/2012 13:31

I am so sorry. Has he contacted the bank yet? He really needs to do this asap. Keep posting as others will be along with proper advice.

Lulumama · 09/06/2012 13:36

the loan must be secured as so large and most likely on the house, so yes, the bank can probably force the sale to recoup their money Sad what a terrible situation.

if the house is in joint names , but your mum was not aware and she did not sign anything, there might be some redress, I don't know...

does your dad have a copy of the loan agreement and the details of what happens if he defaults?

your mum could seek independent legal advice too

Lulumama · 09/06/2012 13:37

if the business premises was their nest egg, do they own it?

MrAnchovy · 09/06/2012 13:50

Try here, they are a charity so won't rip you off and are open until 3pm on Saturdays.

Original poster
lessthan9lives · 09/06/2012 14:57

Yes lulumama the business owned the premises and my dad owned the business so the receivers will get the proceeds from that. My DM knew nothing about this until two weeks ago. None of us even knew the business was struggling. Not even his employees did.

He took the personal loan out without my DM knowing when it looked like they were going under before. The loan just delayed the enevitable. I want to shake him and say 'what were you thinking! That was the last thing you should have done'. But I don't want to make him feel any worse even though I'm not sure he can feel any worse.

I was hoping that because he didn't tell DM and because it was such a misjudged course of action that the bank wouldn't be able to take the house.

I'm on my phone at the moment and will look at that link as soon as I het in MrAnchovy

Thanks for the replies so far.

OP posts:
Lulumama · 09/06/2012 16:26

I second the advice to speak to CCCS

It's a horrible situation but if it's a loan secured on the house and there is no income to pay the loan, then the bank can call in the loan, your parents need advice asap

they also need to make an appt to find out what benefits they can get whilst unemployed.

also, the staff and your mum and dad (if employees of the business ) might well be entitled to a lump sum under this www.direct.gov.uk/en/Employment/Employees/Pay/DG_10026695

which can pay a redundancy out of a government fund if a company cannot pay redundancy due to insolvency

Original poster
lessthan9lives · 09/06/2012 17:58

Thanks lunumama will have a look at those.

Have told DM about CCCS. We will see what they say on Monday.

Damn the bank that sold the wretched loan to DF, it was taking advantage of a desperate man who wanted to save everything he had worked for his whole life. DF is taking it all very very badly. He was going to retire in a few years and feels very guilty about the people who worked for him. The business was doing well until a couple of years ago.

I don't really know how it can all fall appart like this Sad

OP posts:
YesMaam · 09/06/2012 19:54

Is their house in joint names? If so mother's share (presumed 50/50) should be protected either by her ignorance about the personal loan (and if indeed it was secured on the property she should have received correspondence about it) if not any future court might treat the joint tenancy as being severed into tenancy in common in equal shares. Therefore if there is some equity in the property, she should be able to keep half.

That does not mean however she'll get to stay in the house, if it needs to be sold to pay back the loan.

Also unsecured debts can be secured by a court process and a charging order then an order for sale, so whether it actually was secured is not very relevant.

Hope the charities can give you some better/clearer advice.

Original poster
lessthan9lives · 10/06/2012 20:38

Thanks for the advice so far and bump for the evening.

OP posts:
RedRibbons · 10/06/2012 22:21

I agree with YesMaam. If the house is in joint names and the loan is secured on the house then there may be some way of your mum protecting her share. I would assume she would have had to be a joint signatory to the loan for it to be secured on a jointly owned property.
Horrible situation tho and hope your parents get some resolution.

Original poster
lessthan9lives · 11/06/2012 08:36

That's the issue RedRibbons she wasn't joint signatory. He took out the loan without her knowledge. She is contacting the debt charities today.

I wish there was something I could do to stop this happening that didn't need money none of us have. There is no way they could even get a mortgage now Sad

OP posts:
Collaborate · 11/06/2012 09:11

If only your father signed the loan, and the security, it may well be what is called an equtable charge. I'm surprised that the bank would take such a charge over a property, as usually any charges are legal charges and bind therefore the whole land - these will need the signatures of all owners.

I presume that you are certain that both parents jointly own the property?

In any event, it cannot affect your mother's interest in the property.

Original poster
lessthan9lives · 11/06/2012 09:29

Yes Collaborate definitely joint owned property. Their mortgage was paid off a few years ago. Dad says the property isn't specifically mentioned on the loan agreement just that he is personally liable for it's payment. I will double check with him.

I think it's increadably irresponsible of the bank to give a personal loan to a struggling limited company. Surely there is some duty of care to give sensible financial advice? This was the worst thing DF could have done given the circumstances.

OP posts:
crabbyoldbat · 11/06/2012 16:56

What would the situation be if this is a personal loan but secured against the business premises? (which seems quite likely to me) Would the receivers deal with it in that case?

Original poster
lessthan9lives · 15/06/2012 09:08

Hello again.

Have asked DM to get a photo copy of the loan agreement to take to citizens advice. She has an appointment next week. She has emailed CCCS. DF has spoken to the job centre and is applying for government redundancy. Thank you for this advice. Having practical stuff to do at least makes DF and DM feel like they can salvage something.

I have got some more information and was hoping that someone could help:

DM and DF are 'Beneficial joint tenants' with regards to ownership of the house. DM did not sign anything, she wasn't even aware of the business situation.

DF says that he signed a 'personal guaranty' for the loan, but it is not secured on the house. He is certain of this.

Does this influence matters?

From a getting on with life point of view how can I best get them through this? DF seems broken Sad

OP posts:
Original poster
lessthan9lives · 15/06/2012 09:10

And thank you to those who have take time to read this and offer advice. It means allot.

OP posts:
crabbyoldbat · 15/06/2012 09:34

I only have experiince of being the person who took out a joint personal loan, secured on property, to prop up a failing business (both joint owners of the house had to sign, by the way). The business still went into receivership, and five years later we're still paying the loan Sad and will be for some years, but it's a lesson learnt...

Anyway, I came here to say that I found this forum quite useful when it came to sorting things out and finding out what our position was: www.ukbusinessforums.co.uk/forums/

crabbyoldbat · 15/06/2012 09:40

Actually, it might have been this one, too: www.freebusinessforums.co.uk/#main-business-forum