Pre-insolvency advice Loan Sales: Should I Be Worried?

If your loan has been sold to a third party you could fall victim to aggressive repossession techniques such as legal action, repossession of assets or Bankruptcy.

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Loan Sales: Should I Be Worried?

Often when debtors default on a loan, their original creditor will sell the debt to a third party. These debt purchasing companies or ‘Vulture funds‘ will pursue you for the full amount owed and often use aggressive techniques to recover outstanding liabilities. Loan sales may not be the end of the world but, they can quickly become a serious issue.

This was common practice after the 2008 crash but now, more and more people are defaulting on debts. Therefore, we are seeing more instances of loan sales and subsequent legal action such as repossessions and Bankruptcies.

You are at particular risk if you have signed a personal guarantee for a loan, as you are personally liable for the full amount borrowed.

Why should I be worried?

Vulture funds buy your loan for less than its value e.g. a £75,000 debt bought for £16,000. This means that they are willing to invest more time and effort to pursue you. This usually takes the form of more aggressive techniques e.g. sending recovery agents to your home.

When a third party purchases your loan, you will have to reach a repayment agreement with your new creditor. These companies are notoriously difficult to negotiate with and will be less willing to settle.

How will I know if my loan has been sold?

You will receive correspondence from your original and/or new creditor. After this, you will have to reach a payment agreement with your new creditor. They are under no obligation to accept your previous terms and may demand larger or full repayments.

What are my options?

Loan sales should not change your approach, as with any debt communication is key. Ignoring any creditor can have serious ramifications for you personally as well as your business.

After over a decade in the business, Bell & Company have regular communication and good working relationships with creditors, allowing us to reach settlements that would not be possible otherwise.


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