Challenging Funding Circle Debt

[Monty71]

Any help very much appreciated as just do not know how to resolve this issue as it's been two years now.

A company that I owed with my now ex wife had a 67K FC loan with personal guarantees. The company went into Liquidation 2 years ago and as I understand it the debt is joint and several liability so FC are approaching us both for payment. We have since gone through a Divorce and the only equity either of us have is in the house we can't sell which has been on the market for 2 years. The house is also only in my name with my ex living there.

I've communicated all of the above to FC and they don't seem to have a way to resolve this as I've close to an IVA if I have to pay it all in full.

A question I had is, if I could co-operate with my Ex could we put in a Final offer settlement to them and somehow borrow the money as the problem still remains two years later?

Any help Greatly appreciated. Steven.

 

[Gordon - Commercial Finance]

Could you do a bridging loan to get equity out of the house while you wait for it to sell?

As an aside, unless your house is in an unusual place like out in the middle of nowhere or next to a motorway then 2 years to still have no sale means the price needs dropped.

 

[Mark T Jones]

Could you put a final offer settlement to them? Yes. They can then decide whether to accept or refuse it (evidence that you gave the means may tempt them)

can you borrow the money? In the current market? No idea. And it’s my business to lnow

 

[Monty71]

Thanks Mark. Yes, I could put a full and final settlement offer in however the PG was taking out with myself and my now ex so if I did that I would be paying off the debt myself. I was thinking that if my ex and myself could agree together 'we' could put a full and final settlement offer in etc.

Getting the money is another challenge, however it's been two years and no progress has been made from FC, myself or my ex and I'm not sure it's going to go away.

 

[MBE2017]

Just to add, with the current situation, property price are probably going to take a severe hit in the next twelve months, or longer. With many looking at unemployment on returning from this pandemic, the knock on effects could be more severe than anything witnessed in our lifetime.

No one knows for sure, but I would look at how much equity you potentially have, property could be looking at 25% or more reduction in value, only time will tell, some are forecasting even more.

 

[JEREMY HAWKE]

Are they still charging interest?

 

[Mr D]

Thanks Mark. Yes, I could put a full and final settlement offer in however the PG was taking out with myself and my now ex so if I did that I would be paying off the debt myself. I was thinking that if my ex and myself could agree together 'we' could put a full and final settlement offer in etc.

Getting the money is another challenge, however it's been two years and no progress has been made from FC, myself or my ex and I'm not sure it's going to go away.

They don't care which of you pays up they want payment - if you cannot pay they go after your ex. If she cannot pay they go after you.
There is a property with equity - sounds like something they'd be interested in.

If it can be sold - at this point its anyone's guess about housing market over next 12 months. So long as looking lower price.

 

[Mark T Jones]

Funding Circle are an odd beast when it comes to collections - largely due to the way in which they fund their loans

historically they have always favoured long-term rescheduling. At this moment it’s hard to say

 

[Gavin Bates]

Hi

In truth, the best way is to do a joint full and final settlement highlighting the points above about property prices and current state of the market.

Regards

Gavin

 

[Newchodge]

If you do a full and final settlement in your name only they could then pursue your ex for the balance. It has to be in both names.

 

[Monty71]

Thanks Mark, have they historically accepted full and final settlement offers to resolve complex cases where even they don't appear to know legally where they stand. I would like to think that if both of us (my ex) could agree to working together and offering them say 30-40K, they would be interested in that as opposed purloining it for another few years when the economic situation is challenging now. Appreciate you input again.

 

[Mark T Jones]

Thanks Mark, have they historically accepted full and final settlement offers to resolve complex cases where even they don't appear to know legally where they stand. I would like to think that if both of us (my ex) could agree to working together and offering them say 30-40K, they would be interested in that as opposed purloining it for another few years when the economic situation is challenging now. Appreciate you input again.

I’ve no idea. I’m simply reporting back from experience of others

as I say your best approach here will be to demonstrate that you are able to raise that sum of cash and to put the offer to them

 

[Jenny Julian]

Just a word of caution that unregulated bridging loans could result in higher interest rates and default penalty clauses after the initial period and it sounds like you wont have an exit from a property sale within the short term a bridging loan implies. Do some research on bridging loan mis-selling and try and borrow from a regulated mainstream lender on a domestic mortgage which incorporates the FCA MCOB rules.

 

[Porky]

I’m actually shocked at how ruthless FC are on recovery, really shocking.

In one case I know they are heaping interest and charges on the PG joint debt and insisting that any restructure is subject to a floating charge on both houses so if one doesn’t pay the other is liable.

Frankly I would look at the bankrupt option and fck them, but I guess FC are banking on the house being sold at any price, even at fire sale prices to get their cash back?

But would they really go as far as going to court to make someone homeless?? Anyone know if they have been successful in doing that?

And if they did take it to court Wouldn’t the courts agree so much per month rather than bankrupting the individual and making them homeless?

 

[MBE2017]

We don’t know the facts but in general I am not a fan of borrowing money when in debt, it rarely seems to help in the overall picture.

One other point, several people are mentioning full and final settlement against an offer, be advised few lenders tend to do this. Most tend to record it as part payment settlement these days, a subtle difference but one against your credit score. I doubt it worries most people since needs must.

For the time being I would suggest offering a payment plan, no matter how small or ridiculous. In the current climate they might accept, make it affordable for you to live on, and state you are happy to review the amounts as the economy improves.

If they were ever to go to court at least you can state that you have made an offer, courts can impose even easier repayment plans sometimes, one reason many do not rush into court.

Talk to them, but do not promise any cheques you cannot cash. As advised, I would also get your house revalued.

 

[Financial-Modeller]

Limited info as always, but @Monty71 can you clarify:

1. the amount borrowed GBP67k originally, and during the time the business was operating, the loan was reduced to how much outstanding?, or
2. the amount borrowed, with fees and interest is now GBP67k?
3. how the value of the company was divided in the divorce. Did you share the asset value at the time, or liability at the time equally?
4. you mention that the house is owned by you. Does your ex-wife have assets that FC can pursue her for?

If the loan outstanding is below GBP50k, a straightforward Unsecured Personal Loan each would seem to be the obvious option.

 

[From_The_Ashes]

Any help very much appreciated as just do not know how to resolve this issue as it's been two years now.

A company that I owed with my now ex wife had a 67K FC loan with personal guarantees. The company went into Liquidation 2 years ago and as I understand it the debt is joint and several liability so FC are approaching us both for payment. We have since gone through a Divorce and the only equity either of us have is in the house we can't sell which has been on the market for 2 years. The house is also only in my name with my ex living there.

I've communicated all of the above to FC and they don't seem to have a way to resolve this as I've close to an IVA if I have to pay it all in full.

A question I had is, if I could co-operate with my Ex could we put in a Final offer settlement to them and somehow borrow the money as the problem still remains two years later?

Any help Greatly appreciated. Steven.

Funding Circle are extremely aggressive when it comes to pursuing debt. They will reject your IVA if the proposed return is less than 30%.

However, if you put in a proposed final offer of 30% of your debt, they will accept it. That's their minimum floor. They'll reject anything less.

They'll also look to declare you bankrupt if they don't reach an agreement with you - that's what they did to me. I was going to declare bankruptcy anyway, so I let them do and sod 'em. I had no assets that could be realised so I let them spend the 600 odd quid or whatever it was. Saved me having to pay it.

 

[Overloaded]

The lockdown has lenders reacting differently I think- in my case I was told by professionals, lawyers , debt collectors , that when iwoca was chasing me they would be ruthless , never take a penny less etc etc
In one well written letter to iwoca - I offered , 20% of my total personal guarantees (which were over 25k)
Highlighting a few mistakes they made etc -
Accepted straight away and was paid a fortnight later

and I was told it was impossible - so who knows - I personally would start lower in the full and final negotiations - but I’ve never dealt with finding circle

 

[From_The_Ashes]

debt collectors , that when iwoca was chasing me they would be ruthless , never take a penny less etc etc

Debt collectors would tell you that though!

 

[Overloaded]

Debt collectors would tell you that though!

True

 

[Mark T Jones]

I’m actually shocked at how ruthless FC are on recovery, really shocking.

?

and rightly so. They are a business not a charity. Their principle responsibilities are to their shareholders and loan investors. Paradoxically, if you speak to them they will be of the opinion that FC are far too weak on collections

it always amazes me how many people think lenders should lend to all and sundry, then have the temerity to chase what they are owed

As a rule, after playing hard ball they will look for a sensible compromise- ie one that will stretch you financially but will be just achievable.