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Turning over a new leaf -Revise, Revaluate, Repay - news article image

Turning over a new leaf -Revise, Revaluate, Repay

4 Nov 2020

2 minute read

There is a common mis-conception that Insolvency Practitioners (IPs) only deal with companies or individuals in respect of formal insolvency processes.

What happens, however, if you approach an IP because you have a personal liability to a bank or another lender?

Mr & Mrs Client had provided a joint and several guarantee for a loan to a well-known high street lender (the Bank). The original loan had been provided to Mr Client’s limited company, which had recently entered into Insolvent Liquidation. There was unlikely to be any return to creditors, so the Bank was demanding the full balance from Mr & Mrs Client.

Mr Client had no income since the demise of the company and Mrs Client worked part time. They have three children, and at that time, insufficient income to cover their costs of living. Their family home did, however, have significant equity, enough to pay the Bank in full.

Mr & Mrs Client were obviously desperate not to lose their family home. They were keen to co-operate with the Bank but felt out of their depth.

How did Shaw Gibbs add value?
Shaw Gibbs were instructed to guide them and to liaise with the Bank to try to find a repayment plan that worked for all parties. Shaw Gibbs kept the lines of communication open with the Bank throughout the UK lockdown, managing their expectations and keeping them updated.
Moving forward to September 2020, Mr Client had secured a 12-month consultancy contract with quarterly bonus payments, and thanks to family, a loan equivalent to 10% of the overall liability to the Bank. As a result, a payment plan has been agreed with the Bank to be reviewed in 12 months.

Mr & Mrs Client are extremely relieved, as they will be able to keep their family home and build for the future, whilst honoring the liability to the Bank.

The Bank have expressed their appreciation of having Shaw Gibbs in place to guide Mr & Mrs Client to understand the Bank’s expectations of quantum and timings and keeping them up to date.

So, if you or one of your clients or even a friend needs an intermediary to help guide them in dealing with a lender, or understand their options when finances are tight, do not forget that an IP is not just for formal insolvency processes.

See our previous case studies:
Turning over a new leaf -Revise, Revaluate, Repay - news article image


Karyn Jones

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