Funding Circle chansing me for a business debt which is included in my IVA

[Reggie2021]

I’m being chased by Funding Circle for business debt which is included in my IVA as I was a personal guarantor. I am making all my IVA payments and all my extra money goes into the IVA. I’ve explained to FC that if I make payments to FC outside of the IVA then I am breaking the IVA rules by acting favourably towards one creditor. But they are chasing and chasing me.


The Limited Company stopped trading about 8 months before the IVA was put in place. I’ve not made the Ltd Co. Dormant or closed it because I wasn’t sure I was allowed to because of the business debts which have personal guarantees against them.


I was told by a “debt specialist” that because FC are covered under the IVA as I gave a personal guarantee, they shouldn’t be chasing me via this non-trading Ltd Co route for payments.


They disagree and says the non-trading company (which hasn’t traded for over 3 years) should make payments. I didn’t apply for any Covid loans as I thought yhat would also break my IVA rules. The company has had no income for over 3 years.


I don’t know where I stand, can anyone explain this to me please?

 

[japancool]

Did Funding Circle attend the creditors' meeting when you arranged the IVA, and did they vote for or against it?

 

[Reggie2021]

Did Funding Circle attend the creditors' meeting when you arranged the IVA, and did they vote for or against it?

Thanks for responding.
Yes, they attended and They voted for it

 

[japancool]

Then ignore them, or tell them to FC the hell off.

They are pursuing the company, not you. The worse they can do is wind the company up, and if it has no assets, they get nothing. They cannot then come after you, because the debt is included in the IVA.

If they are chasing you personally, that's harassment and it's illegal.

 

[Reggie2021]

Then ignore them, or tell them to FC the hell off.

They are pursuing the company, not you. The worse they can do is wind the company up, and if it has no assets, they get nothing. They cannot then come after you, because the debt is included in the IVA.

If they are chasing you personally, that's harassment and it's illegal.

Yes, they have started calling me constantly, should I ask a solicitor to write a letter telling them to stop harassing me? They stopped calling during Covid, but have started again…

 

[Reggie2021]

Then ignore them, or tell them to FC the hell off.

They are pursuing the company, not you. The worse they can do is wind the company up, and if it has no assets, they get nothing. They cannot then come after you, because the debt is included in the IVA.

If they are chasing you personally, that's harassment and it's illegal.

Thank you very much, I really appreciate you taking the time to answer me.

 

[japancool]

Yes, they have started calling me constantly, should I ask a solicitor to write a letter telling them to stop harassing me? They stopped calling during Covid, but have started again…

Do that, and point out in the letter that harassment is a criminal offence. Send it recorded delivery.

Are they contacting you on your personal number or on the number you previously gave out as your company's number?

 

[Reggie2021]

Do that, and point out in the letter that harassment is a criminal offence. Send it recorded delivery.

Are they contacting you on your personal number or on the number you previously gave out as your company's number?

Thank you.
On my personal number. But I cancelled the company phone years ago as I could no longer afford it.

 

[japancool]

Thank you.
On my personal number. But I cancelled the company phone years ago as I could no longer afford it.

That could constitute criminal harassment. Keep a log of every time they call or otherwise contact you, and if it continues despite the letter, speak to Citizens' Advice.

 

[Reggie2021]

Thank you very much, I will do.

 

[japancool]

Why don't you just dissolve the company?

 

[Reggie2021]

Why don't you just dissolve the company?

Thanks.
I thought brcause of the IVA it mught be blocked by creditors. Can I apply to close it via Companies House and then write to the creditors explaining I’m applying to close it as it’s not traded in a long time and there’s no assets? I don’t want to miss any steps I should take and give FC a reason to take me to court.

 

[Mark T Jones]

From my reading of your post, I can see no reason why they can't chase the company for the debt, using whatever contact details you provided.

 

[WaveJumper]

And have you not given a personal guarantee?

 

[kulture]

They are chasing the company. Write to them saying that the company has no assets and has ceased trading. Apply for the company to be struck off. Tell them you are doing this. Tell them that all communication should be in writing only and any further calls will be considered harassment.

there is nothing stopping you from closing the company. In fact you should do this. Your mistake was not doing this. It has nothing to do with your IVA

 

[ChrisCallaghan]

Hi @Reggie2021

As others have commented, whilst the company still technically exists they are entitled to contact it's director (i.e you) regarding outstanding payments.

As suggested you can write to FC explaining the company's current situation, but from experience FC won't stop making contact. Sadly I have always found them to be quite an aggressive collector.

At this stage the best thing to do would be to look to close the company. There are a couple of ways this can be done. Firstly I would suggest reading the 'SpongeBob Method' on this forum. This can be lengthy process though and FC will continue to contact you untill the company is finally closed. Alternatively you could explore liquidating the company. This would be the quickest way to resolve your problem but can be a bit pricey. Given that you are also in an IVA at the moment, paying privately for a liquidation would be tricky. So in addition to reading the 'SpongeBob Method' I would also advise contacting a licensed insolvency practice. Most will be happy to give you free and confidential advice.

 

[Lisa Thomas]

I agree with Kulture and Chris. It sounds like they are not chasing you in your capacity as a guarantor/under the IVA, they are chasing the Company as the original debtor.

Once the Company is dissolved or liquidated they should stop chasing.

 

[ChrisCallaghan]

Link to the SpongeBob method below:

https://www.ukbusinessforums.co.uk/...ich-to-pay-an-insolvency-practitioner.316523/

 

[fisicx]

And have you not given a personal guarantee?

This is quite important. FC almost always ask for a personal guarantee which means even if the company closes they can still get their money back.

 

[ChrisCallaghan]

This is quite important. FC almost always ask for a personal guarantee which means even if the company closes they can still get their money back.

By the sound of things they have already enforced the personal guarantee, and it is included in Reggie2021's IVA.

 

[Mark T Jones]

Hi @Reggie2021

As others have commented, whilst the company still technically exists they are entitled to contact it's director (i.e you) regarding outstanding payments.

As suggested you can write to FC explaining the company's current situation, but from experience FC won't stop making contact. Sadly I have always found them to be quite an aggressive collector.

At this stage the best thing to do would be to look to close the company. There are a couple of ways this can be done. Firstly I would suggest reading the 'SpongeBob Method' on this forum. This can be lengthy process though and FC will continue to contact you untill the company is finally closed. Alternatively you could explore liquidating the company. This would be the quickest way to resolve your problem but can be a bit pricey. Given that you are also in an IVA at the moment, paying privately for a liquidation would be tricky. So in addition to reading the 'SpongeBob Method' I would also advise contacting a licensed insolvency practice. Most will be happy to give you free and confidential advice.

It always perplexes me when people criticise lenders for collecting what they are owed - or in FC's case, what investors are owed.

The primary function if a lender is to collect money

 

[japancool]

It always perplexes me when people criticise lenders for collecting what they are owed - or in FC's case, what investors are owed.

FC try to collect when there is nothing to collect. There's not a lot of point in aggressively demanding money when the debtor has no money to give you.

 

[ChrisCallaghan]

It always perplexes me when people criticise lenders for collecting what they are owed - or in FC's case, what investors are owed.

The primary function if a lender is to collect money

You have a fair point. And FC are not doing anything they shouldn't be whilst the company still exists. However other lenders, such as the common high street lenders, will often accept that the company is unable to repay, has ceased to trade, has no assets etc and cease contacting the company when they enforce the PG. In this particular example, a lender such as HSBC, Barclays, NatWest etc would've likely accepted that the debt cannot be collected from the company, and that the director is now in IVA. They would cease contacting the @Reggie2021 as the director and liaise with the supervisor of the IVA.

 

[Mark T Jones]

You have a fair point. And FC are not doing anything they shouldn't be whilst the company still exists. However other lenders, such as the common high street lenders, will often accept that the company is unable to repay, has ceased to trade, has no assets etc and cease contacting the company when they enforce the PG. In this particular example, a lender such as HSBC, Barclays, NatWest etc would've likely accepted that the debt cannot be collected from the company, and that the director is now in IVA. They would cease contacting the @Reggie2021 as the director and liaise with the supervisor of the IVA.

Irs true, but they do have different models

FC is responsible to each individual loan investor, whereas the banks manage portfolios

 

[Lisa Thomas]

FC try to collect when there is nothing to collect. There's not a lot of point in aggressively demanding money when the debtor has no money to give you.

I agree with that however I think it's all too easy for a party to state they don't have the ability to pay a debt, when that may not actually be true.

 

[fisicx]

I agree with that however I think it's all too easy for a party to state they don't have the ability to pay a debt, when that may not actually be true.

If they have a car/house/huge TV then they can’t say they have nothing. That’s the whole point of a personal guarantee. Cancel Sky, eat cheap food, but a smaller car. Lots of ways to raise cash to repay a debt.

 

[japancool]

If they have a car/house/huge TV then they can’t say they have nothing. That’s the whole point of a personal guarantee. Cancel Sky, eat cheap food, but a smaller car. Lots of ways to raise cash to repay a debt.

And if they don't have a car, a house, or a big TV, or money in the bank, what's the point of chasing them?

 

[fisicx]

And if they don't have a car, a house, or a big TV, or money in the bank, what's the point of chasing them?

None at all. But to give a personal guarantee a credit check would have been done to see if you can pay. Someone with nothing wouldn't pass the credit check.

 

[japancool]

None at all. But to give a personal guarantee a credit check would have been done to see if you can pay. Someone with nothing wouldn't pass the credit check.

Not true at all. A credit check simply shows if you have kept up with your credit commitments. It doesn't mean you have a lot of assets.

 

[fisicx]

Not true at all. A credit check simply shows if you have kept up with your credit commitments. It doesn't mean you have a lot of assets.

they have a lot more information available than just your credit commitments.

 

[japancool]

they have a lot more information available than just your credit commitments.

Still doesn't show whether you own property, or a car. It may show previous agreements for a mortgage or a car loan, but neither of those are necessary to pass a credit check.

 

[fisicx]

Still doesn't show whether you own property, or a car.

They will check your address against the land registry records.

I agree there are limitations but they do run a lot of checks based on the details you put in the application. I asked my wife about this because she does this sort of stuff for a living.

 

[japancool]

They will check your address against the land registry records.

I agree there are limitations but they do run a lot of checks based on the details you put in the application. I asked my wife about this because she does this sort of stuff for a living.

You still don't have to own any assets of significant value to pass a Funding Circle credit check.

I know - I did.

 

[WaveJumper]

You still don't have to own any assets of significant value to pass a Funding Circle credit check.

I know - I did.

Out of interest did you have to give a PG

 

[japancool]

Out of interest did you have to give a PG

Yes.

 

[MikeJ]

It always perplexes me when people criticise lenders for collecting what they are owed - or in FC's case, what investors are owed.

The primary function if a lender is to collect money

As an investor with FC, I'm quite happy that they chase those that aren't paying back what they borrowed.

 

[Reggie2021]

And have you not given a personal guarantee?

Yes and that’s why the debt is included in my IVA.

 

[Reggie2021]

They are chasing the company. Write to them saying that the company has no assets and has ceased trading. Apply for the company to be struck off. Tell them you are doing this. Tell them that all communication should be in writing only and any further calls will be considered harassment.

there is nothing stopping you from closing the company. In fact you should do this. Your mistake was not doing this. It has nothing to do with your IVA

Thank for reaponding, I understand now.

 

[Reggie2021]

Hi @Reggie2021

As others have commented, whilst the company still technically exists they are entitled to contact it's director (i.e you) regarding outstanding payments.

As suggested you can write to FC explaining the company's current situation, but from experience FC won't stop making contact. Sadly I have always found them to be quite an aggressive collector.

At this stage the best thing to do would be to look to close the company. There are a couple of ways this can be done. Firstly I would suggest reading the 'SpongeBob Method' on this forum. This can be lengthy process though and FC will continue to contact you untill the company is finally closed. Alternatively you could explore liquidating the company. This would be the quickest way to resolve your problem but can be a bit pricey. Given that you are also in an IVA at the moment, paying privately for a liquidation would be tricky. So in addition to reading the 'SpongeBob Method' I would also advise contacting a licensed insolvency practice. Most will be happy to give you free and confidential advice.

Thank you very much, I will read the SpongeBob post and apply via Companies House to have it stuck off then write to FC to let them know.

 

[Reggie2021]

I agree with Kulture and Chris. It sounds like they are not chasing you in your capacity as a guarantor/under the IVA, they are chasing the Company as the original debtor.

Once the Company is dissolved or liquidated they should stop chasing.

thanks Lisa, good to see consistent advice provided.