Bounce Back Loan Help

[Honey57]

Hi Everyone,

If anyone has experience with HSBC bounce back loan default procedure your advice would be appreciated.
I have a bounce back loan as a sole trader through HSBC. I exhausted all PAYG options and made monthly payments for a while but despite my best efforts, I couldn’t manage anymore.
HSBC issued a default notice in August 2022.

It’s been nearly 18 months, and every few months, they call and ask if I can afford to pay. I consistently explain that I can’t, which results in a breather period each time. It seems like this cycle is going on indefinitely. They have just given me another 60 days breathing space.

I thought lenders could only chase such debts for 12 months. What I should expect going forward?

Your advice would be greatly appreciated. Thank you!

 

[japancool]

I thought lenders could only chase such debts for 12 months. What I should expect going forward?

I'm not entirely sure where you got that impression from.

As a sole trader, the debt is yours personally. You can be pursued through the courts, and if the lender makes you bankrupt, your home and vehicle will be at risk.

How much is your loan for?

I suggest you speak to the Business Debt Line: businessdebtline.org

 

[Honey57]

I'm not entirely sure where you got that impression from.

As a sole trader, the debt is yours personally. You can be pursued through the courts, and if the lender makes you bankrupt, your home and vehicle will be at risk.

How much is your loan for?

I suggest you speak to the Business Debt Line: businessdebtline.org

Not a very helpful response and didn’t answer my question.

I know the debt is mine - I didn’t question that. I asked what the next steps are. They have not asked income and expenditure or taken any other steps to recoup the money except calling me for the last 18 months. Whenever I ask them where we go from here they just give me breathing space. I just want to move on to the next steps and make an arrangement.

They will not make someone bankrupt unless there is a real reason to expect illegal action or misuse of funds etc - they aren’t going to bankrupt me over a few thousand pounds. Don’t scaremonger.

 

[japancool]

OK, you obviously know best. Good luck.

 

[Honey57]

OK, you obviously know best. Good luck.

Thanks for answering my question. Your contribution was invaluable.

 

[Newchodge]

Perhaps you could clarify what you need advice about? As you have been told, the creditor can pursue you. This can last until they achieve repayment or until 6 years has passed since either there is activity or a CCJ is granted.

 

[japancool]

Thanks for answering my question. Your contribution was invaluable.

You asked for advice.

I suggest you speak to the Business Debt Line: businessdebtline.org

You got it.

 

[Honey57]

Perhaps you could clarify what you need advice about? As you have been told, the creditor can pursue you. This can last until they achieve repayment or until 6 years has passed since either there is activity or a CCJ is granted.

I just wanted to know whether anyone had experience of what HSBC next steps are.
I thought someone might have experience of what they do next - they really haven’t taken any steps to recoup the money and enquire about my finances. I wanted to arrange a repayment plan but they won’t do this with me and just offer breathing space. I get a 1 minute phone call every few months and they’re very kind but it doesn’t progress. I just want to get it dealt with. When I have called I’m just told there is nothing to do at the moment.

 

[WaveJumper]

Have you tried making an appointment with the bank so you can sit down and discuss your options and a possible payment plan. HSBC in my experience are very inefficient and the last thing you want is them suddenly out of the blue pursuing you for the balance through the courts.

Out of interest as you are willing to arrange a payment plan are you currently just paying what you can afford a month, if not maybe an idea to do this until something more formal can be negotiated, best of luck

 

[ChrisCallaghan]

I just wanted to know whether anyone had experience of what HSBC next steps are.
I thought someone might have experience of what they do next - they really haven’t taken any steps to recoup the money and enquire about my finances. I wanted to arrange a repayment plan but they won’t do this with me and just offer breathing space. I get a 1 minute phone call every few months and they’re very kind but it doesn’t progress. I just want to get it dealt with. When I have called I’m just told there is nothing to do at the moment.

@japancool is absolutely spot on and I suggest you follow his advice. Presently banks who have provided Bounce Back Loans to sole traders week will do as you've experienced. Now that all PAYG options have been exhausted, they will likely pass the collection of the debt to one of their preferred collections agents. The negotiation of repayment will essentially begin again. In short, this isn't a debt that would simply go away or be forgotten about.

Presently, to my knowledge banks are not taking steps to bankrupt sole traders, however this may change in the future.

The sensible thing now would be to take debt advice, exploring options such as a Debt Management Plan, an IVA or Bankruptcy.

 

[ChrisCallaghan]

@japancool is also spot on that the best charity in your circumstances to take advice from would be Business Debtline.

 

[Mark James]

Can you afford £50 a month payback?

 

[Lisa Thomas]

You say the bank isn't going to bankrupt you for a few thousand pounds, but you haven't stated how much you owe?

As you are personally insolvent you should take personal insolvency advice. I agree with Japancool, Business debt Line is one option. Another is Stepchange.

 

[gmstar2024]

Hi,

I'm in the same position with HSBC bbl...but I am a limited company...do I write them a letter stating I can't afford to repay the loan no longer ?

 

[ChrisCallaghan]

Hi,

I'm in the same position with HSBC bbl...but I am a limited company...do I write them a letter stating I can't afford to repay the loan no longer ?

Hi @gmstar2024 ,

The options are a little different for dealing with a BBL for your limited company.

Can I ask if you are still trading through your Ltd? How much is outstanding on your BBL? Does your company have any other outstanding debts?

For a helpful summary of your options for managing a BBL, please see this link on our website:

What Can I Do If I Can’t Afford To Repay My Company Bounce Back Loan (BBL)? | Wilson Field® - Licensed Insolvency Practitioners

If your limited company cannot afford to repay its coronavirus Bounce Back Loan (BBL), the owed amount is classed as an unsecured debt.

www.wilsonfield.co.uk

 

[gmstar2024]

Hi @gmstar2024 ,

The options are a little different for dealing with a BBL for your limited company.

Can I ask if you are still trading through your Ltd? How much is outstanding on your BBL? Does your company have any other outstanding debts?

For a helpful summary of your options for managing a BBL, plea

Around £37k remaining I have used all the pay as grow options..it's no longer trading but active I am still submitting yearly accounts as not sure what implications I'll have if i dissolved it as bbl still outstanding...there is no other debt

 

[gmstar2024]

Around £37k remaining I have used all the pay as grow options..it's no longer trading but active I am still submitting yearly accounts as not sure what implications I'll have if i dissolved it as bbl still outstanding...there is no other debt

 

[Lisa Thomas]

Does the company have any assets, including debtors or an overdrawn director loan account?

 

[ChrisCallaghan]

Around £37k remaining I have used all the pay as grow options..it's no longer trading but active I am still submitting yearly accounts as not sure what implications I'll have if i dissolved it as bbl still outstanding...there is no other debt

If the company is no longer trading, and if you have no further use for it, I think it would be sensible to consider closure options.

Ultimately you're not personally liable for the BBL, however there are few factors worth considering, such as the position of any directors loan account and how you used the BBL.

I'd be happy to offer you a free consultation on the options if you'd like to explore this further. If you'd like to direct message me your contact details and your availability for today, I'd be happy to have a chat with you and give you some free advice on your options.

 

[gmstar2024]

There are no assets of directors loan, all though I did use some for personal use to cover my bills during covid times...

 

[ChrisCallaghan]

There are no assets of directors loan, all though I did use some for personal use to cover my bills during covid times...

It might be an idea to go back through your company bank statements to identify how much of it was used for personal use.

Could you hazard a guess how much of the BBL you used for personal bills etc?

 

[gmstar2024]

Around £2500 also its £47k that's outstanding not £37k

 

[ChrisCallaghan]

Around £2500 also its £47k that's outstanding not £37k

Then I wouldn't worry if it's that low. The amount may need to be repaid as part of a company closure process, such as liquidation, but that can be covered as part of paying for the liquidation itself.

Also the Insolvency Service won't be interested in pursuing a director's ban for such a small amount.

I stand by my advice (subject to a deeper understanding of your circumstances) that it would be sensible to explore company closure options to see if the BBL can be written off.

Myself, or any of the other insolvency regulars here on UKBF, such as @Lisa Thomas , would be happy to talk you through the options confidentially and at no cost. Please feel free to message me on here, or contact me on the details in my post signature, if you'd like to arrange to have a chat.

 

[gmstar2024]

OK thanks will do

 

[Lisa Thomas]

You could just about liquidate the company in court if you repay your DLA. The court costs are £2,900.

 

[UK Contractor Accountant]

I thought lenders could only chase such debts for 12 months

Its 12 months from the issue of the formal demand for full repayment of the loan.

 

[UK Contractor Accountant]

Around £2500 also its £47k that's outstanding not £37k

Loan Debt of £47K.

Any other debts?

Have you looked at carrying any losses back in the last year of trading to generate a corporation tax refund?

 

[gmstar2024]

Loan Debt of £47K.

Any other debts?

Have you looked at carrying any losses back in the last year of trading to generate a corporation tax refund?

Not sure what you mean as use a accountant to do returns etc

 

[UK Contractor Accountant]

If the company has debts of £47K with no assets then this indicates that business was loss making at some stage.

Check all available loss relief has been claimed including 3 year carry back of loss in final year of trading.

 

[gmstar2024]

What's the repercussions of If can't pay back bbl repayments and used some funds for personal use ?

 

[ChrisCallaghan]

What's the repercussions of If can't pay back bbl repayments and used some funds for personal use ?

Hi, I'll talk you through this when we speak on Monday, but for the small amount you've had, it's not going to cause any problems.

In summary though, it's classed as a directors loan, which you are responsible to pay back to the company.

For those who've spent most/all of the BBL for personal benefit, they may also face a directors ban if/when their company is closed.

Assuming you've only spent the small amount you described on personal bills, then this isn't something you'll need to worry about.

 

[HFE Signs]

I haven't any experience in this but have you worked out what you can afford and offered that? Might be a good starting point.