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bigduckontax
bigduckontax, Accountant
Category: Tax
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I have applied limited company to be dissolved by Companies

Customer Question

I have applied for my limited company to be dissolved by Companies house. They have in turn informed my business bank account who have contacted me about my overdraft of 5K that is due for renewal this week.It has been personally secured by myself when I agreed to it initially. What are my options regarding repayment go loan if company is dissolved by Companies house.?I would like to offer to pay it off over the next three months. Can I ask that they transfer it to a loan on the same interest rate as the overdraft?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
My immediate reaction is why go through the palaver of closing down a company when you could have sold it off as a clean company; you can even do this on eBay.
I assume that by business bank account you actually mean the company's bank account. You can certainly ask the relevant bank if they will accept the transfer of the loan to you and its clearance in three months. If, of course, in the meantime, they have closed the account they will have shot themselves in the foot so they will probably not do that until the loan is cleared. It all depends on your credit status now as the whether the bank are prepared to play ball. I would certainly be inclined to give it a whirl.
I do hope my answer has been of some help to you.
Customer: replied 2 years ago.

Hi I am not submitting accounts on the company I am dissolving and the new bank would want to see current accounts before taking on the 5 k. I do not know anything about selling a company on eBay. How do I find out?

Expert:  bigduckontax replied 2 years ago.
Well, take a gander at www.ebay.co.uk; you will find many if you look on the eBay site and enter 'Limited companies for sale.'
The new bank will want to see your personal accounts if they are making a loan to you. The accounts of a company which owes 5K and is being dissolved is of no use to them.
Expert:  bigduckontax replied 2 years ago.
Try here for an example of a company for sale on eBay:
http://www.ebay.co.uk/sch/i.html?_from=R40&_trksid=p2050601.m570.l1311.R4.TR4.TRC2.A0.H0.Xlimited+comp.TRS0&_nkw=limited+company+for+sale&_sacat=0
Customer: replied 2 years ago.

Apologies for my delay on this one - my wifi went down and I have only got it up and running again!

Your responses have been very helpful. I am still with my initial quandary as to the best next steps. I have a new company and new bank account up and running but the new bank want to see 6 months revenue on my company before committing to an overdraft facility.

As I have explained, I still have 5k overdraft in my current bank account that I will not be able to transfer because I have not submitted any accounts on this company and am applying for it being dissolved instead. I don't think my current bank account will be impressed with that so I just want to arrange a way of repaying the bank the 5k without it becoming an exorbitant loan interest rate or it go into default and the debt collectors get involved and thereby screwing up my credit reference.

Is it realistic that I propose to pay back the 5k over three months at the same rate of interest that it is currently on as an overdraft facility.? The overdraft facility id up for review in two days and I want to try and reach an equitable resolution whilst I am still in term with the overdraft rather than waiting for it to go into default.?

Expert:  bigduckontax replied 2 years ago.
I am sure that the existing bank will be prepared to extend the overdraft period to suit your intended repayment schedule. To argue the toss at this stage is pointless as you could just walk away and leave them high and dry!
Customer: replied 2 years ago.
Thanks. But I don't think I can walk away leaving them high and dry. I have personally guaranteed the overdraft so I am personally liable whatever I think. is this not the case? i am just trying to limit my damages so to speak and not create a bad credit history if I can help it.
Expert:  bigduckontax replied 2 years ago.
You are correct if you have indeed guaranteed the overdraft then in the end it is indeed your liability. If you pay the debt off then your credit history is actually likely to be enhanced.
Customer: replied 2 years ago.
Can the bank threaten me with debt collectors and bad credit if I don't pay up on their terms ( ie at an interest rate they determine or immediate payment of outstanding overdraft) ?
Customer: replied 2 years ago.
Can the bank threaten me with debt collectors and bad credit if I don't pay up on their terms ( ie at an interest rate they determine or immediate payment of outstanding overdraft) ? Also I do not understand your point about my credit rating increasing. Are you saying that if my overdraft goes into default and I then pay it off my credit rating will improve from its current rating??
Expert:  bigduckontax replied 2 years ago.
If the bank agree to your proposed repayment schedule then your credit rating will not be affected. When you pay the overdraft it may well be enhanced.
Customer: replied 2 years ago.

but if the bank decide to go down the default route will this influence my credit rating?

Expert:  bigduckontax replied 2 years ago.
It will, but this is unlikely as you clearly intend to settle your laibilities.
Customer: replied 2 years ago.

Okay . Final question on the matter. My overdraft review is due on the 3rd April 2015. How long have I got before the bank can make it a defaulted position if they decide to be bloody minded and don't accept my proposal to pay within 3 months? Do they have to give me notice of some time before they pass it on to the debt collectors?

Expert:  bigduckontax replied 2 years ago.
I would tend not to panic. It takes time to progress a default process and if you genuinely are going to clear the debt a Court is most unlikely to support the bank. Debt collectors can be appointed, but things like bailiffs etc can only be mobilised by a Court whose judgement in such a matter is unlike to support the creditor under the conditions you envisage. Thrue they will threaten everything under the sun including imprisonment and execution, but always conveniently forget the small matter of a Court hearing and the fact that the Debtors' Prison went out long ago..
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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