Posts Tagged ‘Corporate Debt Negotiation’

BAD DEBTS – CASH FLOW PROBLEMS

Bad debts can very often cause a perfect storm for any SME business owner, especially those which are totally unexpected i.e the client was ‘good for it’.

This will be a relatively short blog but what we will do is comment on our viewpoint on bad debts here as:

  1. We are at the front end of business issues and find ourselves receiving increasing enquiries across the board, and
  2. Being a business owner is a lonely carry-on and hopefully, this will show its not just you struggling with this issue.

Typically, bad debts arise in a range in differing forms:

The bad debt situation causes real knock-on problems across the board with:

Bad debt wallops cash flow as we all know. My senior partner, when training to be an accountant, said: “CASH FLOW IS THE 7TH WONDER OF THE WORLD”

He added even Robert Maxwell had cash flow, only it wasn’t his, as he pillaged the Mirror Group’s, Pension Fund.

If you are suffering from cash flow issues or looking to avoid customer issues, we would offer the practical tips in terms of assessing someone’s credit risk and or viability:

  1. Always use a credit agency on the person and or company,
  2. Push for PG’s, and
  3. A big one for us is what information is out there using:

So that’s this week’s blog…we would implore you, if you are suffering alone here, Bell & Company are here to help.

Negotiating with Creditors

Negotiating with Creditors.

No creditor/debt collection agency are the same. They often have different processes and protocols along with various criteria that must be met. One thing we do advise is being proactive. Liaising regularly and amicably with your creditors will aid the negotiating process.

However, creditors often pursue cases aggressively, leading to hostility between lender and borrower. Furthermore, the lender may find it difficult to understand your situation. When liaising directly with a lender they will find it difficult to fully empathise with your circumstances. It would be a case of you strategically presenting your information.

Who we are

Bell & Company are Debt Strategists and negotiate with a variety of lending institutions daily. We specialise in assisting borrowers with problematic Mortgage Debt and Corporate Debt issues. Based in Belfast, we operate across the UK. Our experienced team pro-actively works to achieve the best possible outcome, given your circumstances.

Successful methods of negotiation

Bell & Company believe that appointing an intermediary can greatly increase your chance of success in debt negotiations. Having an intermediary can remove the emotion from the situation.

We liaise amicably with creditors whilst fighting your corner, ensuring both parties are satisfied with the outcome. Above all, Bell & Company are impartial and ensure we achieve the best possible settlement for our clients. Furthermore, the representations we make to your lender are tailored to your circumstances and the lenders’ requirements.

Moreover, we can reduce the timeframe and the stress associated with debt negotiations whilst increasing the likelihood of success. Bell & Company urge borrowers to be proactive by contacting their lenders and be honest about their circumstances. Many lenders have policies in place to help those in financial difficulty.

For expert advice on negotiating with creditors, or any material debt issue – Call us now on 0330 159 5820 or read our brochure

How loan sales and vulture funds could result in thousands of people losing their homes

A financial advisory company that specializes in dealing with personal and professional insolvency is warning how a state bank’s decision to sell off troublesome and underperforming loans could result in thousands of people losing their home.

Bell and Company are keen to alert homeowners in the North that are likely to be affected by Permanent TSB’s decision to put under-performing mortgages up for sale as part of Project Glas.

Terry Bell, Bell & Company Principle, said: “This decision by Permanent TSB is going to have lasting and damaging effects for those who own properties in certain regions. We are currently working with a number of clients that we know will be put out by this decision.

“The bank is 75% owned by the state and is planning on selling a loan book worth €4 billion to vulture funds. It’s important to recognize though that in some circumstances, not all of the customers who are going to be affected by this are underpaying or are guilty of not engaging with the bank and their financial responsibilities.”

“Often in these kinds of circumstances, customers who have engaged with their bank and have established financial arrangements are still classed as “non-performing”, despite their clear intentions of paying off their loans.”

“This sale will undoubtedly “stoke the fire”, of the many homeowners and investors who have been able to avail of extremely low tracker-rate mortgages, and the lender will definitely come under pressure from the new owner.”

“We are now urging anyone that is concerned about the implications of this proposal to get in touch with us today and allow one of our specialized financial advisors to help you find the best possible outcome for your problems. We are experts when it comes to providing strategies for people keen to overcome property debt.”

Those facing these property problems should also be aware that attempting to negotiate with vulture funds can be hazardous, especially when it comes to restructuring mortgages.

Terry continues: “With figures revealing that the amount of mortgages in arrears held by private investment funds has risen and home possession is also rising, perhaps it is time for politicians and parties to stand up against the damaging effects that vulture funds can have on ordinary families.”

For more information about managing debt or to get a free financial review, call Bell & Company on 02895 217 373 or email [email protected].

The professions most likely to fall into debt

Anyone, regardless of their job, years of experience, age or financial situation can fall into debt. This can be the result of a whole host of factors such as difficult personal circumstances, business deals gone bad, irresponsible lending on behalf of banks and more.

Having said this, not all professions are created equal. The same way in which choosing a certain career path or profession will give you a greater chance of earning more money, some careers also come with an increased likelihood of falling into debt. Read on to find out which ones they are and why this is the case.

Property investor

Property developers are at increased risk of falling into debt due to the volatility of the housing market. Making a large investment in a property before renovating it can leave you in debt. Debt that you may have initially thought you could repay by selling the newly renovated home.

However, a stagnant housing market and rising property prices could result in you not being able to achieve the sale price you wanted. Leaving you in debt with a property you’re unable to sell or the prospect of selling at a reduced price and making a loss.

Bar owner

Running your own bar is a dream for some, but it’s an extremely risky operation. Generational drinking trends mean that an eye-watering 12 pubs an hour are closing down in the UK, despite years of beer tax cuts. This means that the customer base for pubs is dwindling every year. Although, there are also a host of other factors which make falling into debt a strong possibility for pub landlords.

Large electricity and heating bills are required to keep pubs running. Other bills include large payments for rent, alcohol, and refrigeration. Many pubs also have their own kitchens, which also rack up large energy bills. The result of this is that a bad month of business can be devastating to bar owners, due to the consistently high bills. Making the risk of them falling into debt relatively high.

Fleet manager

Another job that poses a high probability of falling into debt is fleet managers. These professionals depend upon their drivers and cars working as efficiently as possible in order to make money, but this sadly isn’t always the case.

Unexpected accidents can cost fleet managers tens of thousands of pounds in repair bills and suddenly leave them facing huge debts. Whereas, problems such as fuel theft and inefficient driving styles can slowly drain a fleet manager’s profits until they become losses.

If you fall into debt through your job then the answer isn’t always bankruptcy. Sometimes a settlement can be made with the debtor that could shave hundreds of thousands of pounds off your bill.

Call 0330 159 5820 to speak to one of our specialised debt strategists.

Alternatively, read our E-brochure for some information regarding Bell & Company. 

The debt hotspots of the UK

Debt hotspots

Debt is a problem that’s plaguing the whole of the UK. In fact, household debt across the country has increased by 7% in the last five years alone. New figures suggest that half of British adults could be financially vulnerable. Not all areas of the UK are equal in their debt problems, however. Whilst the problems which are causing debt rises in the UK are largely the same, some parts of the country fare worse than others in terms of how many people are in debt there. Read on to find out more about Britain’s debt hotspots and why the people who live in them are falling into financial difficulties.

Newham

Topping the list of debt hotspots in Britain is Newham in London. For a borough with a population of 308,000, Newham has some 60,000 people in debt. This shocking statistic is borne of a variety of reasons, one of which being the startlingly low average household income of just £15,704. This is a far cry from the national average of £22,204 and, when coupled with the higher cost of living in London, has resulted in many of Newham’s residents turning to credit cards simply to get by.

Lenders seem to have forgotten the causes of the recession in this respect; it was through careless lending by banks to people who had little chance of paying back what they owed that the global financial crash of 2008 occurred.

Another factor which accounts for the high level of debtors in Newham is the low employment rate; only 68.7% of people in Newham have a job, as opposed to the London average of 73.8%. Again, this points to the reasons that so many are looking to use credit cards and loans to alleviate their debt troubles, but it only adds to the vicious circle of debt that so many of Newham’s inhabitants find themselves in.

Stoke-on-Trent

Another one of the UK’s debt hotspots can be found north of Newham in Stoke-on-Trent. Consumer lending in Stoke ballooned by 10% in 2016, a sign of the times that lenders may indeed be becoming trigger-happy in agreeing to loans once more. The Stoke Citizens Advice bureau points to the fact that, similarly to Newham, people are borrowing to pay day-to-day bills for things such as rent or council tax. Stoke has one of the highest insolvency rates in Britain too; 43 people in every 10,000 are insolvent in the city, proving once again that a high cost of living is fuelling the need to borrow unsustainably, with this phenomenon  being facilitated by careless lending on behalf of banks.

Bell & Company are debt strategists who negotiate on your behalf. If you are going insolvent or experiencing severe debt issues, in particular mortgage debt or commercial loans, call us today.

English ‘buy to let’ case settled within 5 months

A young man based in England approached our company regarding an unsustainable ‘buy to let’ property he owned.

After weighing up his options, he decided after much deliberation to surrender the property back to the lender. Thankfully the property sold quickly and left a shortfall of just over £30,000. This shortfall is deemed as a “manageable debt”, especially for someone who is quite young and in full-time employment. “Smaller” shortfalls such as these are notoriously difficult to settle, especially at a lower percentage. They will often take quite some time.

In this instance, however, our clients were in a position to offer £3,000 in full and final settlement, 10% of the debt. The lender was extremely cooperative, thanks to our strong professional relationship and the case settled within a few weeks. From surrender to the settlement, the turn around was just 5 months. Needless to say, our client was ecstatic!

“Smaller” shortfalls such as these are notoriously difficult to settle, especially at a lower percentage. They will often take quite some time. In this instance, however, our clients were in a position to offer £3,000 in full and final settlement, 10% of the debt. The lender was extremely cooperative, thanks to our strong professional relationship and the case settled within a few weeks. From surrender to the settlement, the turn around was just 5 months. Needless to say, our client was ecstatic!

From surrender to the settlement, the turn around was just 5 months. Needless to say, our client was ecstatic!

If you find yourself facing issues surrounding property debt, feel free to contact us.

Our team will endeavor to answer your queries within a few hours of receiving your inquiry.  If your query is of an urgent nature you can call our office directly on  02895 217 373 or speak to a member of our team via live chat. We offer a free consultation and full financial review.

 

A young couple caught up in the Recession


A young couple found themselves caught up in the Recession, financial downturn of 2007, have a look at their journey to success.

The couple had made investments into 3 rental properties across different lenders, along with having a mortgage on their own home. After the downturn in the market in 2007, they found themselves with 4 properties in negative equity.

With rental income not covering their mortgage payments for the properties. At this point, our client sought resolution consultation from Bell & Company and our trained debt strategists were able to devise a plan for moving forward.

Following attempt for resolutions for 2 properties, the couple found themselves faced with an aggressive non-cooperative lender. Through rigorous negotiations, our team, after developing a tailored strategy were able to achieve a full and final settlement at 10% of their shortfall, with savings of over £55,000! A great success for the couple, and for Bell and Company.

If you are facing any of the issues highlighted above, feel free to get in touch with one of our team here at Bell and Company. You can contact us on 02895 217373 or speak to us via our live chat.

Have a look at our Negative Equity page here.

Do I have to tell my employer that I’m in debt?

Do I have to tell my employer that i'm in debt

Do I have to tell my employer that I’m in debt?

There is no hard and strict rule that explicitly details every employee who’s in debt must inform their employer or there would be a queue of people outside of HR’s door after every Christmas.

Having said that, there are some professions where debt may become an issue. An existing or new employer has the right to perform any due diligence to confirm that you do not have a County Court Judgement -CCJ- or are Bankrupt.

In Bankruptcy, you are put on a NIL Tax Code so it may become obvious to your employer that you are Bankrupt. There are also other ways your Employer can become aware of your Bankruptcy when performing their due diligence.

CCJs are for outstanding debt, and any organisation can apply for one – whether it’s for small amounts such as a household bill or larger sums like a personal loan. If the judge finds in the Creditor’s favour, the borrower is obliged to pay the debt. However, if the debt is paid off in full within thirty days, the CCJ will not show on your credit file.

If it takes longer than thirty days for you to pay the outstanding debt off, your CCJ will appear on your credit file for 6 years which is mostly how a CCJ is identified.

Most employers don’t have restrictions that are aimed at their employees in debt. Some employers, however, have clauses in their contracts which state that employees who have a CCJ against them or are Bankrupt can be at risk of discontinuation of their employment.

Mostly in specific professions that involve the handling of money, such as working in a Bank or as an Independent Financial Advisor, debts as well as going Bankrupt, could result in you being dismissed from employment.

Some positions require you to be a member of a particular regulatory body that may involve terms that hinder those who have a CCJ against them or are Bankrupt from retaining their membership. This can have a huge knock on effect on your financial prospects, so if you think your employment is at risk and notice you are getting into debt, talk to us about our pre-insolvency options before making decisions that could greatly affect your employment status.

One important thing to remember is that you’re not alone there have been plenty of people who fell into debt but are now thriving. With our professional guidance, you can plan, approach and settle.

Why not check out our earlier blog where we assess whether or not your job is at risk when considering bankruptcy:

 

https://www.bellcomp.co.uk/blog/will-i-lose-job-i-go-bankrupt/

For further advice on Bankruptcy watch the video below:

A Guide to Director’s Personal Guarantees

 

A Guide to Director’s Personal Guarantees

A Guide to Director’s Personal Guarantees

What is a personal guarantee? Why would I need one?

At the height of the business boom, banks were often very happy to provide loans to companies. They often required the directors of these businesses to sign an agreement, stating that in case of the company being unable to repay these loans, the signer, or guarantor, would be personally responsible for the repayment.

Although these agreements are not a problem as long as the business is repaying its loans under the agreements agreed by the lender, they have become more of an issue since the 2008 financial crash. Suddenly, companies have found themselves in difficulty, and lenders are entitled to pursue bankruptcy against the guarantor if they cannot repay the terms agreed when the original agreement was signed.

Limited company vs. sole traders/partnerships

Personal guarantees were generally only signed by directors of limited companies. Sole traders or those who work in a business partnership will often have been issued loans in their names.

Both kinds of loans put individuals at risk of losing assets or even being declared bankrupt if repayment fails.

What if I can’t pay?

If you signed a personal guarantee for your limited company and both the company and you fail to keep up with repayments, your lenders will pursue you to recover the outstanding debt. If you go straight to an Insolvency Practitioner, you will find they are legally obligated to try and get the best deal possible for your lenders.

Even if your bank account is overdrawn, your creditors can take legal action against you, and you could even find yourself under investigation.

What do I do next?

There are always options. You don’t have to face the stress and uncertainty of being liable for repayments by yourself. Bell & Company, as pre-insolvency consultants, specialise in helping people like you. If your loan has been sold off by your original lenders to a so-called ‘vulture’ fund who aggressively pursue debt repayment, Bell & Company’s involvement can help take some pressure and strain off your shoulders.

Bell & Company are fully informed of the most effective methods in order to get you the best possible outcome. They have numerous success stories, helping clients who were being pursued aggressively by lenders and creditors start fresh, without the threat of further repayments hanging over their head.

Contact Bell & Company here to see what they can do for you.

Can I be considered personally liable or be pursued for the Debts of my Business?

A primary question that many will ask as their Business beings to fail is, “Can I be considered personally liable or be pursued for my  business debts?”

SOLE TRADERS/PARTNERSHIPS
Many people in business will operate as an individual, Sole Trader or Partnership.
If this has been your chosen trading style, it is most likely that any borrowings from Lenders to support your Business will have been issued either in your personal name or that of the Partnership. That being the case, you will no benefit from limited liability status and, resultantly, are liable to be pursued for the full amount of the monies borrowed.

Where a secured business facility that has been issued to an individual(s) Partnership debt falls into difficulty, the subject Lender will work through the sale of any security held in order to seek to reduce the balance owing. Once this has been completed however, the individual(s) are fully exposed and can be pursued for the crystallised shortfall, up to and including Bankruptcy in which case personal assets can be at risk.

It is imperative that anyone in this position prepares themselves pro-actively in order to maximise protection as otherwise, home and other assets of importance could be materially exposed.

LIMITED COMPANIES AND PERSONAL GUARANTEES
If you operate as a Limited Company, then it is likely that any business debt will be taken out in the Company name, i.e. an entirely separate entity from the individuals operating the business

HOWEVER
In the event that you have signed a Personal Guarantee(s) on any facility obtained for the benefit of the Company, for example on a business loan or property lease, and the Company is rendered incapable of meetings its obligations under the terms of the agreement then you, as a Guarantor, will be personally responsible.
If you don’t meet the payment schedule/terms and conditions of the agreement, then the Lender, whether a Bank, Landlord or other, will pursue you personally for the debt and will take whatever action required to recover the full amount due under the Personal Guarantee.

OVERDRAWN DIRECTOR’S LOAN ACCOUNT WHEN COMPANY IN LIQUIDATION

If there is an overdrawn Directors’ Loan Account when a Company goes into liquidation, then the Directors will be held personally liable for repaying that loan. The IP appointed on the liquidation will demand and pursue repayment on behalf of the Creditors.

The IP is fully entitled to take legal action against the Director(s) personally which could, once again, lead to Bankruptcy if repayment cannot be facilitated.

Having an overdrawn Director’s Loan Account in a liquidation situation can also lead to personal Revenue liabilities and investigation if over a certain level.

MOVING FORWARD 

The expert team of Corporate Debt Strategists here at Bell & Company can provide Impartial and tailored advice to suit your needs. Contact us today for a free consultation on 02895 217 373 or contact us  where we can quickly review your case and point out your options.

I am a company director of a limited company with personal Guarantee. How will this effect me?

I am a company director of a limited company with personal Guarantee. How will this effect me? More often than not where a Lender is offering loan facilities to a Company, they will, by way of security, require a Personal Guarantee to be offered by the Director(s) of same Company. This will essentially provide the Lender with the reassurance that, even in the event of the Company becoming insolvent, they can pursue the Directors directly and personally in relation to monies owing. It provides them with an extra layer of cover so to speak…

Directors (especially in the past) will have seen this as a risk worth taking, particularly as it could massively influence the Lender’s decision as to whether to approve/deny a loan application submitted on behalf of the Company. This is all very well when the Company is performing however where a Company begins to experience financial issues/is showing signs of being in a position of financial distress, Personal Guarantees can have serious and hard hitting consequences for the obligated Director(s).

In some instances, Personal Guarantees will be capped at a specific amount and the amount will have been influenced by the overall, net worth of the Director(s) at that time. In other instances however, Guarantees will be somewhat open ended and will be as wide as to cover all debts owing by the Company to the subject lender. Negotiating in relation to a Personal Guarantee is most definitely possible, when broached in the correct way and with the right presentation, however is not straightforward.

The subject lender will analyse the position in an in-depth manner and conduct a high level of due diligence, often engaging specialist professionals, in order to determine what can be recovered thus it is imperative that positioning and approach is concise and watertight. Creditors will look at various aspects of the Director(s) position, not least, to include asset/monetary position and a number of documents, reports and evidence will be required to be submitted in order to support any submissions made. There are central in the context of negotiations.

Once again, the importance of obtaining the correct advices with regards how to communicate/approach must be stressed here as this can very often mean the difference between losing and retaining livelihood/home etc. The importance of being pro-active cannot be emphasised enough as failure to do so will often result in Judgment/Statutory Demand, both of which can be avoided when the correct steps are taken.

To conclude, we would state as follows:

Whilst Personal Guarantees do not very often impact/feature in the thought process of Directors at the time of loan application and where the Company is performing, other than to be considered the determining factor re sanctioning/rejection, they can have serious, personal consequences where the Company becomes insolvent and the debt is called in. The Lender is entitled to explore all surrounding property, the equity therein and the financial well-being of the individual and can pursue up to and including Bankruptcy in which event there is often a lot at risk.

This can be avoided in its entirety if the correct line of communications are adopted from the outset and with the right advice, guidance and representation. There are significant savings to be achieved if handled in the correct way – We have achieved savings at 0.6% of overall debt owing however each case will be circumstance dependent. Why take the risk caused by delay…?

Act now and protect what is important.

My home has been sold and now I have received a letter chasing an outstanding balance. What are my options?

As the various lending institutions work through their ‘delinquent’ mortgage books, more and more people are approaching us at the end of the sale process, when the lender and their agents, usually solicitors, chase and seek recovery of the outstanding amount due, after the disposal of the asset(s) involved.

If a property was purchased pre property crash, then inevitably there will be a significant price variation after a sale based on today’s property values. Negative Equity is an extremely prevalent issue in today’s property climate in Northern Ireland and across the UK.

Invariably this balance will be a lot higher than you thought but will include the following additional information:

1.       All the interest since the last payment made.

2.       The property would have been sold ‘In Repossession’. Recent DSD figures show that these properties yield as little as 59% of the market value.

3.       Costs of the necessary action to recover the property through court.

4.       Any other associated costs

 

The balance left after the sale, I.e. ‘The shortfall’ is relative and the route which is taken is dependent upon two key factors

1.       Do you have significant surplus income? And/or

2.       Do you own other assets?

 

Inevitably, the balance is irrelevant. If a client cannot afford to pay a £70,000 shortfall, then they most certainly will not be able to afford a £100,000 shortfall.

Therefore, If the answer is no to both of the above questions then the options open to you firstly and the lender secondly are:

1.       A choice of formal insolvency, be it bankruptcy or IVA, subject to your individual circumstances.

2.       An informal insolvency option to settle with the lender on a full and final basis for a reduced amount.  

 

As ever we would implore you to be proactive as these things will not just go away.  By this stage the lender and their advisors usually want the matter resolved, one way or another, as does the client. 

Bell & Company have developed a specialised team who work with a wide variety of lenders and situations and resolve issues like these on a daily basis with excellent success.  If you find yourself with any of these issues, please get in touch with us here at Bell & Company. To discuss your case with us please call Karen on 02895 217373 to arrange your free initial consultation at a time and place to suit you. We look forward to assisting you.

Brexit to potentially delay Bank Loan Sales

In recent times, we have been approached by various individuals, businesses and professionals, all of whom have received letters from their primary lender essentially providing them with them with three options as follows:

(a) Pay now in full

(b) Re-finance and pay in full

(c) Failing the above, we will sell to a third party fund

Needless to say, this has caused grave concern for many, particularly as the time frames implemented, along with the options provided, are neither reasonable nor feasible. Recent discussions that we have been party to however have revealed that, as a direct result of Brexit and, indeed, the lingering sense of unknown and uncertainty as to how things will look/operate going forward, there has been complete failure in terms of attracting third party interest for loan purchase.

Previous loan sales have attracted the attention of monumental vulture funds such as Cerberus, Cabot, Loan Star etc. however it would appear that the appetite is non-existent this time round…for now anyway. This means that certain loan sales have been delayed for now which is neither what the Banks wanted, nor what they had planned for. Further communications with the relevant Bank’s have further demonstrated that the Banks are, once again, open to proposals of settlement where addressed forthwith. This welcomes a final opportunity and shot for those, previously threatened with loans sales, to engage with their subject Bank forthwith and to look to put matters to bed once and for all, seeking final settlement and resolution and thus avoiding further delay.

 

The experience to date with certain loan sales for many Borrowers has been a heightened sense of delay and thus frustration in dealing with matters. We would strongly encourage and, indeed, emphasis to anyone in this position, importance of seeking to deal with matters now rather than putting them on the long finger in which event, the same issues/debts could continue to surround and pressurise months, years even, down the line yet with continued, accruing interest and charges. Why wait – Engage now with a view to finding peace, freedom from the burden of pressuring debt and, indeed, a new beginning!

 

Call us now in order to discuss your options going forward and to start on the path to resolution

Will seeking to reach a settlement with my lender impact on my credit rating?

Far too many people underestimate the importance of their Credit Rating. It is a key tool in life and maintaining your credit score can bring about significant benefits to you in sourcing any form of credit from an Energy Account, Mobile Phone, Credit Card and all the way to Mortgages. A strong credit score will allow you to access higher levels of credit at much better rates.

Bell & Company will advise of the full ramifications of the process you take will have on your credit file. That is why our advisors typically ask for your credit file when we meet for our free initial consultation, it is key we hav all of the information so the team can paint the full picture for you.

Some advice we hear clients given regarding their credit rating is appalling. Many advise to simply stop payments – this can damage your credit rating massively and should you default will cause you 5-6 years of difficulty. Make sure you get the correct advice by calling Bell & company and attending a free initial consultation.

In answering the title, it depends! Through the negative equity resolution process your credit score can be maintained depending on your circumstances and the lender processes involved. Some lenders however will require missed payments and this can cause damage to your credit file. Once again, if you provide us with the full information from the outsets we can offer advices as to the impact on your credit score.

To discuss your case with us please call 02895 217373 to arrange your free initial consultation at a time and place to suit you. We look forward to assisting you.

Can I sell if I’m in Negative Equity?

Bell & Company regularly hear individuals in Negative Equity declare themselves as “Mortgage Prisoners”. This opinion is often developed from listening to poor knowledge of their circumstances and not seeking professional independent advice.

The answer to the question is, YES but it depends.

Releasing a charge on a deed

Some lenders will allow borrowers who are in Negative Equity to sell their property. This must be done with prior consent from the lender. Otherwise, they will not release their charge on the deed so there would then not be clear title to complete the sale.

Open Market Sale

The lenders who do allow an open market sale will require a full financial review often in their own format. Bell & Company know which lenders allow borrowers to sell on the open market and we also know the processes. Our Resolution team achieve on market sales agreed with lenders daily.

Some lenders however will not allow an open market sale. This does not seem like a commercially minded decision given that an open market sale if beneficial for all parties. Achieving the true price for the property which will ensure the lender receives the maximum sales proceeds possible and the borrower’s shortfall debt is reduced.  Nonetheless, this is their stance and must be respected.

Even if you are with a lender who will not allow an open market sale it is still possible to offload the negative asset, but it comes with greater issues. This involves repossession (through court) or voluntary surrender of the property – this will typically mean a sale in possession by the lender which typically achieves only 70% of open market value. There could also be consequences for your credit rating.

Appointing Bell & Company

It is essential you do not deem yourself a “mortgage prisoner” and understand that options do exist and that many people in a similar situation have extricated themselves from Negative Equity by appointing Bell & Company.

Our expert team will ensure the advice is tailored to your situation. We do not tell you what you want to hear but instead what you need to know to move forward. All our initial consultations are free and to arrange yours please call us today on 0330 159 5820.

My Loan Has Been Sold to A Third Party – What does this mean for me?

At Bell & Company, we assist individuals whose original loans have been sold to a third party.

Vulture Funds

An initial reaction from Borrowers whose loans have been sold is that of trepidation.  This attitude is likely brought about by reading articles wherein these third parties being called “Vulture Funds”.  Some firms have outlined the likes of Cerberus and Lonestar as being vulture funds. There is without question the opportunity to resolve defaulted debt accounts and Personal Guarantees.

Many clients, that we are currently assisting in this field, have seen that a loan sale has given them the opportunity to address the issue. The case with many lenders, who sold loan books, is they were previously inundated with cases. These cases required resolving without having the personnel or resources to resolve the matter.

Conversely, a loan purchaser will be looking for a quicker turnaround and a return on their initial purchase which will be a significantly reduced price when compared to the outstanding loan balance, dependent of course on the Borrowers’ surrounding position.

Benefits for the Borrower

Considering this, the benefit for the Borrower is they are dealing with an entity that has the appetite to address the issue and are looking for a return which is significantly less than the overall liability. Essentially, a loan sale gives the borrower a chance to finalise a problematic loan default, Personal Guarantee or debt.

Your third party will be requesting proposals and Bell & Company have the experience on how to structure, present and negotiate any proposal tailored to your current circumstance. Our Corporate department work in this field daily and are changing both the lives of individuals as well as business prosperity. Many successful businesses have been subject to defaulted debt and once resolved the fabric of a successful business can remain.

If you or anyone you know has a personal or business loan, sold to a third party and want professional independent debt advice.

Please call the office today on 0330 159 5820.

Bell & Company always offer a free initial consultation and we look forward to meeting you to outline all the options available.

Could I lose my home?

Could I lose my home?

One thing we understand entirely is that home is sacrosanct to most people thus it is imperative that the situation at home is investigated first and foremost. In many instances, a Borrower/Guarantor’s home will be mortgaged with another lending institution and, as a result of the property crash, there will very rarely be equity in the home thus there is nothing there for lending institutions to pursue/Official Receiver to vest an interest in.

However, each case is different. A lot centers around mortgage balance, current market value and whether there is any equity within the property. A lending institution only can initiate repossession proceedings. if your home has been directly offered as security.

Personal Guarantee

If you have signed a Personal Guarantee, your personal assets are exposed. Any Creditor can seek to realise the equity in any assets relating to you by seeking Judgment and enforcing same thereafter or, alternatively, petitioning for Bankruptcy, even if they have no security.

If there is equity in your home, this will have to be considered in any settlement proposal to ensure that the same is protected. This will often avoid aggressive action than by a Creditor. However, rights are always reserved.

If you or anyone you know could benefit from our services, please call us today on 0330 159 5820.

 We look forward to working with you.

BREXIT – IMPLICATIONS ON NORTHERN IRELAND PROPERTY MARKET

It is coming up to a couple of weeks since the EU Referendum was held and that Brexit was announced. It has been perhaps the most turbulent time in British politics in living memory with party leaders stepping aside or being under severe pressure. Whatever your political views or whether you voted leave or remain the fact is we face a period of instability with very little sound knowledge of the future.

 In respect of property you can almost read an article to suit either markets will be fine or will plummet, you choose the article and your preference.

 Many articles are London-centric, much like the politics pre-referendum and reading those shows that the top end of the property market saw a fall since the result was announced.  It will be interesting to see if this filters down, as we have commented previously the London Property Bubble could burst at any time and perhaps Brexit could be the trigger.

 Looking specifically at Northern Ireland there is far less literature, nonetheless we have found some interesting papers along with comments from associates in our network see the below.

Residential

The simple fact is that Property markets do not like uncertainty.

 Speaking with a local estate agent in Belfast Bell & Company were advised there was a slight reduction in supply of property on the market, vendors where awaiting the outcome of the referendum perhaps before making the decision to list their property. In the immediate aftermath the agent advised that on the Friday three sales fell through ranging from the low to top end of the Belfast market. In terms of the supply factor in may take months to see if this downward trend continues and some point to the fact that limited supply (UK wide) may buffer house price decline.

 Another factor to consider is that the Bank of England Monetary Policy Committee have now aired views to reduce the already incredibly low interest rate further. This may not happen at next week’s committee meeting but could be on the agenda for August.  Bell & Company at the start of the year commented on how we could only see Interest rates rising, clearly this may not be an option for the Bank of England, but again researching you can find an argument to increase interest rates to assist the strength of Pound Sterling.

 Lower interest rates would mean good news for first time buyers who could benefit from a longer period of interest rates being low than previously anticipated. Also cash buyers could benefit further as Banks may look to tighten lending given we are in a period of increased risk and uncertainty.

Commercial

Commercial property in Northern Ireland has seen confidence fall. Even when the referendum was announced confidence began to decline. The shock result has seen further delay in property deals with companies holding off until we see increased stability.

 Brain Lavery, Managing Director of highly respect commercial agents CBRE, was quoted in the Belfast Telegraph lately “Until there is clarification on the ramifications of the Brexit vote, developers of new schemes of all types are anticipated to proceed with caution and an eye on how our politicians work together to regain market confidence in a changed landscape”. CBRE commented that compared with this time last year commercial transactions are down by 27%.

 Clearly developers are rattled.

 Realistically, in the long term, no one really knows how Property Markets will be effected. The UK and Northern Ireland (as we stand) is rudderless and until we negotiate an exit from the European Union we do not fully know the ramifications. Surely, the strength of the Pound and Property Markets will be high on the agenda for Osbourne and the new Prime Minister come October and when they negotiate an exit.

 Unfortunately for some the Brexit vote will have little implication on their debt burden. Bell & Company specialise in Residential Mortgage Negative Equity debt assisting borrowers through the process and eradicating their mortgage shortfall debt. We also assist Businesses and Individuals with Corporate Banking Debt. Our excellent team achieved some excellent results in June and we would be happy to discuss these with you either in person or over the phone. Bell & Company offer market leading pre-insolvency advice and we always offer clients a free initial consultation at a location to suit you.

 If you or anyone you know could benefit from our services please call us today on 02895 217373. We look forward to working with you.

** Brexit Update 04/11/2016 **

keep updated with current Brexit news from the BBC by clicking the button below:

BREXIT NEWS

 

LONDON – IS THE BUBBLE BURSTING?

Bell & Company have previously written posts on the potential property bubble developing in London and the South East of England. In the last week there have been murmurs in the financial press that the bubble could indeed be bursting. London, once deemed one of the most secure property investments, is now looking shaky.

A combination of ultra-low interest rates, investors taking advantage of tax breaks to purchase Buy to Lets and foreign investors encouraged by the stable political environment saw prices reach dizzying heights in the Capital.

Just this week however Halifax revealed prices in London fell by 0.8% which is incredibly unusual, nonetheless this fall links with the additional tax on second homes adding 3% on the purchase price.

Nonetheless other signs (across the entire UK) show signs the market has peaked and may decline. Notable sellers are accepting offers on properties 10% below the asking price with the average UK discount in April being c£25,000 up from £21,560 in January this year.

Henry Pryor, a leading housing analyst, has worked through three property recessions  and sights that the current market conditions has a frighteningly familiar feel to it. Mr Pryror adds the following:

With some indicators sighting a fall could occur see the potential example below.

As mentioned above house prices in London and the South East have been continually rising due to constant demand in the area. With this demand starting to wane we could being to see property prices fall and the start of prevalent negative equity for the younger generation of homeowners.

Should you or anyone you know be effected by Negative Equity please contact Bell & Company today on 02895 217373 to arrange your free initial consultation. Our team achieve regular settlements with a variety of lenders and understand how your lender operates. We look forward to meeting you.

 

FIXED CHARGED RECEIVERS OVERVIEW

For Corporate clients or those suffering business debt issues you may have been advised by a Bank that if your account is not rectified and arrears reduced then a Fixed Charge Receiver (FCR) may be appointed.

Why and FCR is appointed.

Fixed Charge Receivers are appointed once a Banking Institution has chosen to proceed to Recovery on a connection.  FCR are basically the Bank’s own Agents, appointed in order to proceed with the sale of property secured to the Bank.

A Fixed Charge Receiver will be chosen from a Banking panel list, shall be given instruction by the Bank to actively market properties on their behalf in most instances and shall give same Bank on-going advices/recommendations in respect of any offers that are forthcoming.

Consequences of having an FCR is appointed.

They can negatively affect your business through a loss of control. The sale converts from a consensual process into a forced sale scenario. This will ultimately reduce the sales proceeds as forced sales typically result in 70% of market value being achieved, this loss in value will reflect on the borrower with a higher shortfall to repay. FCR fees may also be added to your account. Communications from any potential purchasers will go straight to FCR as opposed to through Borrower direct.

Furthermore, any rental income will be collected by FCR directly. They will honour tenancy agreements where they correctly hang together and where there has been consent however may look to change locks where no tenancy agreements in place. Unfortunately, the borrower is still liable for rates if property is vacant even after FCR appointed.

Our experience with FCRs.

In dealing with FCR’s Bell and Company from experience have found it best to be co-operative & maintain communications. We have had some very positive experiences of working with FCR in progressing sales/transactions. It is also good to keep them informed regarding any interest in property/properties & provide all paperwork requested.

Maintaining a positive relationship with FCR can benefit all parties involved.

If you have any Corporate Banking Issues including issues with Fixed Charge Receivers, then please call Bell & Company today on 0330 159 5820 to arrange your free initial consultation. We look forward to assisting you.

BUSINESS CONSULTANCY – WE DO THAT TOO!

As Bell & Company has grown, we have continually looked to add different skills and services which can benefit our clients. Towards the end of 2015, we were asked more and more business-specific queries from clients and how we could assist in improving their business. Accordingly, we are looking to develop a consultancy side of our business.

Our staff have a range of backgrounds:

Whilst it’s all well and good having some letters after your name. There is no substitute for experience, sometimes the theory learned cannot be put into action.

Having developed Bell & Company with just myself and my son James working in a small 2-person office suite to a firm employing 19 Full-Time staff I understand the pressures and rewards when developing business.  I hope to pass on my experiences to other business owners to allow to benefit from my successes and also to learn from my mistakes.

Not only do we have a fantastic variety of personnel to call upon but thanks to our business developing, we have an excellent network of peers who could also benefit your business.

Bell & Company firmly believe that there are some tremendous business owners and businesses in Northern Ireland and by bringing them together we can stimulate business, trade and ultimately the wider Northern Irish economy, which will benefit all.

If you want to discuss anything regarding your business please contact us today, it doesn’t just have to revolve around debt and even if we are not equipped to assist, it is more than likely we will know someone who will.

As ever though, Bell & Company continue to specialise in Corporate Debt Negotiation, Personal Insolvency, Negative Equity Assistance and should you or anyone you know require a free initial consultation to determine your position and options please call the office today on 0330 159 5820.