Business loan sold to debt collector

[butlerservice]

Hey all,

I signed for a cash facility in 2014 that allowed my business account to go under 0 in debt. The total amount was £15.000 which had to be balanced every year. The problem was not only my negligence for not reading the agreement properly, the bank's supervisor didn't communicate this very clearly and I believe he said the balance period is two years. I believed him on his good word which was obviously ignorant of myself. After exactly one year I did not receive any communication from the bank. My account was still active, nothing happened. I received a letter that I had to clear the fee for the loan rate (my account was at £15.150 by then) I immediately cleared that sum. Now, at that time I'm still thinking that I have one more year to clear this debt up. Unfortunately business wasn't going well however I still had a year to make up for it. Around five months later I receive a letter from the bank demanding that I either pay my full debt within a two weeks or it would be sold to a collecting agency (which is actually owned by that same bank) I've made a deal with the collecting agency who are practicing ridiculously high rates on top of the rate that I am already paying. I used to pay off 150 a month but asked to reduce it to £50 a month since my situation has gotten worse.
Now, what I am paying off is very low and I don't believe that it is because they're really good Christians. This £50/month is not even enough to cover the rates that they are charging me.
I've heard from a good-hearted attorney who practices bank/insurance law that this collecting agency bought my loan for a lower price with the sole purpose of making extremely high profits.

I don't know what to believe anymore, I wish I had more experience. With all that I've been paid off for the last year excluding the rates I'd still have around £13.000 in debt.

My question is: will a collecting agency be willing to accept an offer to pay off debt in one time rather than waiting for the next 7-10 years for me to pay off the full debt? Is it possible that because they bought it for a lower price I can offer for instance £12.500 or make a good deal? Is it possible that they bought it for a cheaper price in the first place or is this collecting agency just hired to collect the loan and make a small amount of profit with these rates?
Thanks

 

[Paul Norman]

This is a slightly confusing post. For example, I am not clear what relevance the religion of the loan provider has?

However, you do seem to be in a complex legal situation, and you do seem to have suffered a bit of a 'slight of hand' on the part of the bank - you don't say which bank.

It is likely that the collecting agency will have the authority to make a deal, however, it is unlikely that they will accept a lower amount than the full balance with interest - that, of course, remains the amount you are contracted to repay.

To answer in more depth, we would need to see the full terms of the original loan. But again, those are unlikely to offer a way of paying less than the original agreed amounts.

Your best option - outside of liquidation options, on which I am not the expert - it just to negotiate the repayments to something you can afford.

 

[Mitch3473]

Dont know if this is of any use but about 10 years ago at the start of the banking crisis we owed £25,000 to the RBS. We had the money tied up in 2 properties with plenty of equity but the RBS pulled the rug, going against an arrangemnet I had with my Bank manager. The RBS had passed the debt to a collection agent
To cut a long story short I paid 2 x £1.00 postal orders every month to the debt collector until I had sold the properties, I was then in a position to negotiate. Now I assumed that my ' debt manager ' worked on commision, had a flash BMW on his drive that was leased up to the hilt and that they had bought the debt for about 15% of its original worth......... They accepted £12,500. 50% of the original debt and folks wonder why the RBS was in trouble.

 

[Mark T Jones]

Like Paul, I'm pretty confused as to the real facts here.

However, the simple answer is that you can make an offer of a reduced sum for one-off payment - they can accept or decline that offer.

Communication is key.

Alternatively they should be able to fix the interest against your repayments schedule.