Advice re. vehicle repossessions / personal guarantees

SMEintrouble

I run a small Limited Company with three vehicles on HP finance with two particular institutions. The vehicles were obtained in 2007 and the business began to suffer in 2008. I have been struggling hard to survive ever since, got payment breaks on the HP accounts and then renegotiated them to start again on new 5 year terms.

At present the business is completely down and this year is not looking good at all. I am now in small arrears on the HP and will not be able to make the repayments at all from this month onwards. One of the accounts has already been “terminated” late last year but I submitted a payment proposal which was accepted (but now I cannot meet it) so I’m already on borrowed time on that one.

The accounts are “Non-Consumer HP” agreements so even for two of the vehicles that I have paid over 50% I cannot hand them back under the "half rule" as that does not apply to “Non-Consumer HP” agreements. I personally guaranteed them.

The vehicles are not worth anything near what I owe so selling them to pay the balances isn’t really feasible. So it looks like I will be facing repossession soon. If that meant walking away from them, I really wouldn’t mind as I can do without the vehicles now as the work is no longer there.

Can anyone offer any advice on this scenario?

How do they go about repossession – will I be given the opportunity to co-operate or will they just arrive out to take me by surprise?

How enforceable are my personal guarantees?

The overall balance is approx. €38K split between two banks. Assuming they will auction the vehicles for nominal amounts, there will be balances left. Personally, I am also broke, mortgages in arrears, personal loans, pre-2008 credit cards, etc. all in arrears. They may call in the personal guarantees but I feel that I can prove inability to pay off these HP accounts now and probably for the rest of my lifetime. Will they take this into account? Are they likely to pursue a Judgment?

Is there any possibility that they could repossess the vehicles and then just leave me alone?

Any advice or previous experiences would be appreciated?

SeanSouth

Sorry to hear about your financial troubles

The new insolvency act will go into operation shortly and there may be a solution in that for you.

PM me if you wish to know more.

Peterdalkey

What a terrible position you find yourself in but it will not be much comfort to know that you are just one of many people in the same boat. The banks all have thousands upon thousands of cases like yours.
It sounds as if you and your business are on the brink in any event and as has been suggested already, the new personal insolvency legislation may offer a way to resolve your intolerable debt burden.

I would contact the lenders and explain that you cannot pay and will hand them back or even offer to dispose of them on their behalf. You are more likely to get the highest price compared to a blow out auction scenario. You may well generate some goodwill with the lenders by doing the decent thing and not forcing them to incur further expense in repossession expenses etc.
Given your personal debt position, they are unlikely to throw more money at it, unless they see assets that they can get their hands on to raise the remaining balance owed.

You do not state the financial position of the company itself, but it will be the primary defaulter. If it cannot pay, it may well be insolvent and you need to be very careful about trading while insolvent. On a personal level, the toll all of this is taking on you must be immense and I would advise you to contact MABS ( www.mabs.ie) . They will give you great advice and support, and help you to work out the best way to proceed. The very act of doing something to resolve this and talking to experts in the whole debt area will lift a great burden from you personally.


Peter

Peterdalkey

Jeez guys, I am very surprised and disappointed that there have not been more posts at least supporting this poor misfortunate businessperson. It could so easily be so many of us facing such a horrific prospect.
I had always believed the posters on this forum to be most generous of spirit, with only the odd exception. Perhaps I am naive as was suggested earlier in another thread. I will certainly review my own participation

Peter

SMEintrouble

While the Personal Insolvency Legislation may be an option for me long term - that will be some time away as the necessary structures are not yet in place and I must deal with the situations that will confront me before then.

I need to hear from people with real hard experience of repossessions under "Non-Consumer" Hp agreements and the aftermath regarding the for personal guarantees. I need to know how to handle the reposesssions and the likelihood of the personal guarantees being activated.

I'm not the only person in this situation so any advice given will be of benefit to others, I have trawled this site and others and cannot find the answers to my questions.

Gloomtastic!

Peterdalkey wrote: »

Jeez guys, I am very surprised and disappointed that there have not been more posts at least supporting this poor misfortunate businessperson. It could so easily be so many of us facing such a horrific prospect.
I had always believed the posters on this forum to be most generous of spirit, with only the odd exception. Perhaps I am naive as was suggested earlier in another thread. I will certainly review my own participation

Peter

Reading the thread this morning, my first reaction was to just offer my sympathies as, apart from MABS, I could give no help to the OP. I thought this may have seemed patronising so decided to say nothing. I apologise OP.

When I left the UK 8 years ago, I was up to my eyeballs in credit card debt, getting the calls daily, letters etc. Living in Ireland knowing that they had no idea where I was living was a great relief. (We eventually sold our house and I could settle all my debts. I was now in the driving seat and the credit card company settled for 50% of the o/s amount).

Take from that whatever you like OP. Try and be positive, and remember it's only money. There are so many things more important than it!

Wishing you and yours the best you can hope for.

Peterdalkey

There are no definite rules and every situation and lender is different . I am involved in a company that often deals with repossessed motor vehicles and I can tell you that the institutions deal most harshly with those who do not engage with them, hence my advice as above.

The bottom line here is that unless the company can pay, you are in line for further recourse on foot of your PG. if you have nothing, it is highly unlikely that they will throw good money after bad. You can get this message across to them if you sit down and explain your personal circumstances to them in detail.

You really should give serious consideration to contacting MABS, it will help you greatly.

Peter

capefear

SMEintrouble firstly I’m sorry that you find yourself in this position but there is light at the end of the tunnel.
Call a close friend and make plans to go for a few pints and forget about your troubles for the night. Because no doubt this has been playing on your mind for a long time and no doubt you could do with a night out, a bit of a break and have a laugh and try to switch off for afew hours.
Then get a pad and write down who personally you owe money to and who the company owes money to. On another sheet write how much you need to survive each week and what the company needs to survive weekly. Is there anything you can cut back on or do without? Can space in the business be rented out or put to some other use. Could you earn more by getting a full time job?
Can the business survive and generate the income you need to pay the bills or are you going to close the business. You need to spend some time looking at the figures for the business and seeing is it viable. Get an outsider to look over the figures as well to help you out. If you decide that the business is not viable close it. It’s not as easy as people think as it’s your baby and it’s hard to let it go but you might have no choice.
Is going bankrupt in the UK or northern Ireland an option, it will be alot cheaper than staying in Ireland and you can close the company and clear your personnel debts at the same time using the same official receiver. If you time it right it can be done before any judgements are taking out against you and you can be debt free in 12 months.
If you decide to stay can the company sell the vehicles yourself chances are you will get more than if they were put up for auction. If you have no other debts from the business approach the HP Company and explain the situation to them and see will they take the money raised from the sale as a full and final settlement? If yes brilliant, if not get MABS involve who will arrange to make a monthly payment that you can afford based on the figures above.
Go to the social welfare office with the figures above and get whatever you are entitled to. Go to MABS and be honest with them, they will work out what you can afford to pay your creditors monthly and MABS will write to all of them telling them how much you can afford to pay monthly. Some creditors will probably get a small amount and others will get nothing for probably 3 – 6 months. This will give you the breathing space to see where you go going forward.
Before you do anything produce some figures and review them and decide a plan.
Contact the HP company and arrange a meeting with them and see what your options are. Contact MABS tomorrow and arrange an appointment as you will probably be waiting a few weeks to see them. Contact the social to see what you are entitled to.
As Peter says keeping in touch with your creditors will stand to you, as at least you are keeping them in the loop no matter how bad it is. If you don’t contact them, they have procedures to follow and won’t do you any favours. With MABS working for you and you been honest with them there is not alot your creditors can do as you are working with them.
Months done the line hopefully your situation will have improved.
HTH

SMEintrouble

capefear many thanks for your comments.

I actually did already make a list of all of my personal and business liabilities just the other day together with a list of all monthly home outgoings. I had actually intended sending this list to all of the banks that I am in debt to both personally and in business with the intention of stopping repayments on all loans both secured and unsecured which I wont be able to afford for the next few months anyway. I have a draft letter written asking each for 6 months breathing space, not asking but telling them and also telling them some hard facts about my families day to day circumstances which have not been ideal due to the lack of cash and the fact that I was trying to meet repayments above basic necessities - and I have just reaslied that is no longer acceptable.

I do have other earning potential available but I need breathing space to explore this and catch up over a few months and this is why I am about to tell all banks to back off and allow me some time to work things out.

There is obviously a bigger picture here than just my HP accounts but my immediate concern was the secured HP accounts and those particular banks closing in quickly and taking action and the fear of cowboys coming around the place unannounced to take back vehicles. I know the unsecured creditors probably dont have much of a leg to stand on if I stop the repayments.

Yes, I will contact MABS tomorrow. Do I presume now that it would be better for MABS to do the communicating with the various banks rather than do it myself? But can MABS work on behalf of a Ltd. company or can they just represent me as an individual? Does MABS have some legal standing that banks must back off upon receipt of their letter?

As for going for a pint, thats the best advice yet and I could badly do with that!!

kc.1

If you think you can trade your way out of the current problems maybe consider peer to peer or crowdfunding loans to tide you over.

I have no experience of these companies (and I know some are sharks) but I have attached a piece from Money Saving Expert in the UK which generally gives good advice-maybe have a look more generally on that website too-just bear in mind that the Irish insolvency process is very different from anything you read about there.

I am not sure if the companies mentioned below are providing finance to Irish companies/individuals but I have seen reference in the past to Irish companies offering similar lending. I just can't find the names atm but maybe someone else here knows?

HTH

"Peer-to-peer lending

Peer-to-peer lending matches borrowers and lenders (savers) taking banks out of the equation. People with spare cash can usually get higher returns lending this money than from saving. Similarly people looking to borrow can usually get lower APRs than from standard loans.

Peer-to-peer lending is relatively new, but is growing in popularity while savings AERs are so low. The three main peer-to-peer sites have around 50,000 people registered as lenders, which means they can usually undercut the banks on loan rates, especially for smaller loans.

If you're looking for a loan, it's worth checking peer-to-peer lending sites Zopa* and Ratesetter*. Both will 'soft search' your credit history on pre-application and will show you the rate you'll get if you apply. This includes the lending fee they'll charge you.

The bonus is that you can make flexible repayments or repay early without facing a penalty. Loan rates vary daily and are determined by the amount needed and length of borrowing. See the table above for some example rates.

Currently, peer-to-peer lending is unregulated, though this will change as the FSA has announced that peer-to-peer lending will be regulated from 2014. However, all major sites have their own safeguards in place to ensure that you pay back, and that lenders don't lose out."

capefear

if it was me I would let MABS deal with as much as possible. But they only look after your personnal debt and you will probably be waiting for afew weeks to get a meeting. I think its an unwritten rule that once MABS send off letters, the banks will leave you alone for an agreed period (3-6 months)once you make the agreed monthly payments (dont quote me on that, thats what ive gather from talking to people who dealt with MABS)

If you get MABS involved on your personnal debts, it can only help when you get it touch with the banks from the companies side of things as they will know that you cant pay not that you wont pay in either capacity.
Can you or have you a set off accounts completed upto say the end of Dec.

Is this an option
http://www.examinership.ie/index.php/examinership-in-practice

I dont know how much it costs but it will get the creditors for the company off your back for 100 days?

Maybe ring around for some quotes?

Chin up it will sort it self out and as the saying goes your help is your wealth so dont let the ba#tards get you down.

highlandseoghan

I can't begin to imagine what your going through it must be very tough on you and your family. Don't wait till the banks have to come after you to get the vehicles. A colleague had some business trouble similar to what you are going through.

He contacted the banks and explained his situation and he arranged to drop the vehicles to the local car dealers where he lives and the vehicles will be sold and they will contact him to discuss any money owed after the sale. He dropped the vehicles back about two - three months back but is still waiting to hear from the banks in relation to any outstanding balance. He is now working through his debts and slowly getting into a better position. He is dealing with a company called smile who he reckons were a great help to him getting back on track. I think you need to contact MABS or Smile straight away or contact the both of them and seek advise. Whichever one or both you contact just be 100% honest about your situation and im sure they will be able to give you advise and help you out.

This must be extremely hard on you and causing sleepless nights the longer this goes on it could lead to your health deteriorating so my biggest piece of advise to you is first thing tomorrow morning contact one or both and start getting the help and advise you need.

I hope things start to improve for you asap.

www.smileireland.ie
www.mabs.ie

capefear

http://www.askaboutmoney.com/showthread.php?t=164861&page=2

See above about smileireland. if you decide to use a debt management company I would do alot of research out there about who to use as its unregulated and they will charge you for the service wheres as MABS are FREE and in your current situation every little helps.

highlandseoghan

Smile didnt charge him anything and he is now in a better position they were free. I wouldnt give him details of a company if they were going to take money off him he has enough going on in his life as it is.

capefear

Hi highlandseoghan sorry I didnt mean to offend. I have never used that company or know any one thats has so I only have forums like boards and askaboutmoney.com to go on for reviews.

Again sorry didnt mean to offend.

SMEintrouble

Well I contacted MABS today but it didn't go well. I first contacted the local office and was told that it would take 12 weeks before getting an appoinement and that I should first call the helpline for initial support and advice and that the helpline would then refer me for an appointment.

I called the helpline, explained my position and the questions that I need answers to. Unfortunately the response was cold and clinical. It was made clear that my overall level of debts is beyond their remit and that I would be better to seek legal advice.

I mentioned my plan to write to each creditor, explain my situation and ask for some breathing space and I was told that this would be a good idea but it was then explained that even if they give me some breathing space that they would still be entitled to seek judgments during this time (and without a court hearing which is news to me because I thought I would get an opportunity to defend myself in a court).

I was told that such Judgments would be applied to my family home (I knew that anyway). When I queried what would happen if I wanted to sell the family home in the future and could have a mortgage plus judgments which when totalled could exceed the selling price, I was told that the Judgments which could not be satisfied would go with the house and be the responsibility of the new owners. I find that quite hard to believe and I said that surely the sale would not be allowed to proceed if that was the case. The person didnt seem to think that selling the house would be an issue in those circumstances and was quite determined that the outstanding Judgments would go with the house. I find that bizarre to say the least.

It was then pointed out that even with Judgments registered that the banks could still pursue me for regular payments.

Regarding my company HP debts, I was told that repossession would be inevitable and that the Personal Guarantees can not be avoided. At this stage I began to have visions of fire coming out of the sky and the earth below me swallowing me up into burning flames. I actually found the persons attitude a little bit hostile.

My only response was to say that I felt that there was simply no answer to my problems and no way out of this mess and the persons silence on the other end of the phone just confirmed that.

I was not offered the opportunity of an appoinement and neither was I offered the booklets and information that the person in the local office said I would.

I have actually resisted contacting MABS for quite some time and I regret doing so today because after the call I felt nothing but total depression and lack of hope.

My plan is now very simple - I will write to all my personal creditors and tell them where I'm at and that I cannot afford any repayments for six months and ask them to leave me alone during that time. Regarding the HP accounts, I can only now let nature take its course and wait for the cowboys to arrive. Other than I'll have to try and keep myself together and continue trying to earn income and do my best to generate funds from whatever assets that might be realisable.

Todays Lessons:-
- if your late with your electricity bill and have a few grand in debts - by all means contact MABS, thats just about the level that they are experienced to cope with
- if you're a failed property developer with tens of millions in debts, you'll be grand, you can walk away from your debts
- But if you've worked hard and taken risks to build a small business and create employment in this country and you find it all crashing down around you through no fault of your own other than the fact that you overborrowed when the banks were shoving money at you - well then you're on your own and just suffer the consequences

highlandseoghan

I can't believe that you got treated so badly and that they couldn't give you any helpful advise. Why is this country so against people who work hard and set up there own businesses employing people and when things get tough they don't want to know you.

Instead of waiting for the hp companies to come out and repocess the vehicles I think you should contact them and tell them your company is in trouble and that you don't see any way of being able to make repayments to them and you want to know can you hand them back or try come to some sort of arrangement. Waiting for them to come calling to your door will only make things worse. Would you think about going in to the banks and speaking to them in person and see what solution they can come up with. I would still recommend you talk to smile after the help they gave my friend it can't do any harm.

Peterdalkey

I am simply stunned by their response and I can only say that they should be thoroughly ashamed to have dealt with someone in your position is such a way. They are part of the citizens advice bureau, only partly in jest do I suggest you would have been better getting on to the Samaritans.
Your only option appears to be is to batten down the hatches and deal with them as they come at you. The judgement mortgage advice is BS, for the secured lender to sell, they would have to provide clear unencumbered title or not get a penny.
You are right to put your cards on the table with your creditors and you should still consider trying to do something with the HP lenders, in my opinion. You may buy some more time and stop the flow of aggro to some extent.
The other drastic action is to gather up as much cash as you can and up stumps and head off abroad and let the vultures fight amongst themselves.. like many of the property guys have done. They will learn, you cant get feathers from a frog.

I assume that you have skills and talents that you could make a living abroad and provide some level of security for your family. If this is the way your country treats you, you owe it nothing.

Simply disgusted to be Irish.

Peter

highlandseoghan

This is why so many Irish people are leaving this country. I am still shocked that mabs could not give you any advise or help. The young people in this country are going to get an education and once finished they will all pack there bags and go, and who can blame them.

SMEintrouble

Thanks guys - yes I will call Smile tomorrow, why not.

Peter, I would leave this country tomorrow if it was feasible but unfortunately its not due to the stage of life that my kids are at it would cause too much disruption.

I might just stand my ground and fight it out as best I can and see what the Insolvency Bill has in store but god knows how long more that will take and we can be sure that it wont be easy and the banks will have the final say. If I could walk away from all my debts tomorrow, family home included, I would be fine, rent a house and I'd make an ok living. Not going to happen that easily.

One thing for sure - they can't take the blood from my body, its only money, they were too quick to give it to me in the first place and now they just wont get it back.

You guys have been helpful but I had really hoped to meet some people on here in the same situation or maybe having already been through the same thing but maybe people just don't want to admit it. Looks like most people are just too ashamed to admit it. Thats what we do here in this country, we keep it quiet, don't want the neighbours to know and all that.

highlandseoghan

I thought you would have heard from people in a similar position to yourself too that could give you information but I reckon people just don't want to acknowledge it or admit there in trouble.

I thought people might have sent you a pm if they didn't want to talk about it in public.

Gloomtastic!

This was in the Indo this morning.
http://www.independent.ie/business/personal-finance/property-mortgages/banks-offer-debts-waiver-if-mortgage-holders-keep-up-payments-3371012.html

kc.1

OP, MABS response is unacceptable-it is really shocking that my taxes are paying for people in difficult situations to be dealt with in this manner.

Please consider sending a letter to a national newspaper about this-I understand that this is not your top priority now but if nothing is done, nothing will change.

Maybe someone better known on boards than me could set up another thread to see how common this response is? If it is common then collectively we may be able to make some noise about it with a view to changing things. Inaccurate and unhelpful information is not the remit of MABS and frankly someone else may have reacted very differently following a conversation like you had with them.

Back to the main issue-I have posted a link to a guide I came across on another forum. Whilst it principally deals with mortgage debts I think it provides some useful guidance that can be applied to approaching all lenders and may be of some help to you.

I will also pm you tomorrow with details of someone I met recently that it is worth you having a conversation with.

http://misc.mortgagebrokers.ie/images/blogimages/2009/february/A%20repossession%20guide%20for%20irish%20home%20owners%202009.pdf

In case the direct pdf link doesn't work, here is the site-I have no connection with this site.

http://www.mortgagebrokers.ie/blog/index.php/2009/02/18/a-repossession-guide-for-irish-homeowners/

SMEintrouble

Ok, here is an update on what I have been doing for the past few weeks.

I made lists of the following:
All liabilities, both personal and business, down to the last cent.
All monthly personal outgoings.
A sensible Business Cash Flow spreadsheet for the rest of the year.

I can prove now on paper that I will not be able to afford loan repayments for at least the next six months but I can also prove that I have potential to recover.

I wrote a detailed letter to all unsecured lenders describing how I have reached this position and how, if I get six months breathing space, I have potential to get out of it. I am telling them that I am making no further repayments until such time that I can afford to and that it is not up for discussion at all. I am describing in my letter in detail how being in debt and struggling to run business has affected me personally, family life and health during the past few years. They might not care but I am being as honest and graphic as I can.

I am phoning each lender and then sending the letter together with all the information that I have prepared and described above. So far, I have met one lender but I have offered to meet each one.

I am surprised so far at the responses. Most are not interested in meeting me. None will agree to a six month breathing space. They all say that if I stop repayments then I will be passed to “Collections Dept” or “Debt Recovery Dept”, they all call it something different. The one bank that I met said that by the time my case is looked at by that Dept, the six months that I am asking for will have elapsed! That same bank dismissed my credit card debts (with other banks) and more or less muttered “you might as well forget about them”. Same bank also told me out straight “don’t be worrying, there’s people coming in here in worse situations than yourself”.
Another bank (not sure if I should name names here) reacted threateningly on the phone and mentioned Debt Collectors and Judgements, I didn’t react, sent my letter and have received no response yet. I seriously regret not stopping my unsecured repayments two years ago. Could have saved me a lot of stress and might have helped me to sort myself out.

Bottom line is that I am not paying any more repayments towards unsecured loans until I can afford to. If they take me to court, I feel that I have a good chance of proving my reasons.

Can someone please answer this – can a bank obtain a Judgment without taking me to court?

Regarding my secured HP loans, one bank has turned around and made it clear that they do not want the assets back due to low resale value and they will work with me no matter what and they will wait a bit longer to see if I can resume repayments. They will also accept reduced settlement so I am trying to sell one of those assets. So, they can wait a bit longer, at least that’s breathing space. Two other banks are playing really hard, and repossession could be imminent, so I am desperately trying to make those repayments and avoid repossession as best as I can, it’s not easy. I do have one or two owned assets that I am trying to sell to raise some cash to pay off towards these secured assets but not easy.

I told the mortgage that I would resume repayments this month but not happening, I will now try to meet them and explain that I should be ok to resume in a few months. I know this is a dangerous game. It’s a UK bank that have left Ireland with their tail between their legs and so far they are not being too pushy. Does anyone else have any experience with mortgage arrears with that UK bank? How long will they wait before taking action?

Apart from the almost full time job of dealing with my debts, I am trying to work and generate income but it just seems to be harder this year than ever before but I’ll keep going.

I made a complaint to MABS about my horrible experience with their helpline, and my complaint has been ignored, I have now demanded a response. I might start a new thread here to describe my MABS experience so that others can be aware of the pitfalls of calling MABS before they get their hopes up of receiving any support.

SMEintrouble

I am giving up.

Moderators - please delete this thread.

bustersdad

don't despair mate,
ive been there ,stop paying all your debts and get yourself on your feet,they will wait for there money.
ps if you need to talk to someone pm me and il give you my number

only you can help yourself ,you get feck all help in this country,as ive learnt to my cost

kc.1

Please don't give up. I think you have achieved a lot and a number of the lenders are broadly saying that they will wait for their money-that is great news, it buys you time and you can also renegotiate the amount of the outstanding debt at a later time. I am not sure that the ones who are demanding payment can do much in 6 months and thus you might want to reassess making payments to them.

You asked whether lenders could take action without a court judgement. In short, each individual loan agreement will set out the remedies available to the lender in the event of default and agreed by you when you signed the contract. Where the agreement is silent, then the lender will need to take you to court for breach of contract in order to enforce the agreement.

Please do contact the guy I mentioned to you, he has practical experience of negotiating his own and others situations with lenders.

Also, I see another poster has offered you his/her number. Please,please also contact them-you are far from the only one in this situation and the practical experience of others will be really helpful to you.

Take care, look after yourself and your family-it will all work out in the end (so many people have the same issues that the banks have no choice but to do deals) but please do draw on the support of others who have been in the same situation.

johnwest288

bustersdad wrote: »

don't despair mate,
ive been there ,stop paying all your debts and get yourself on your feet,they will wait for there money.
ps if you need to talk to someone pm me and il give you my number

only you can help yourself ,you get feck all help in this country,as ive learnt to my cost

But wont the interest on this just spiral into the thousands by just not paying :eek: