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Ed Turner
Ed Turner,
Category: Law
Satisfied Customers: 1910
Experience:  Director and Consultant Solicitor (Self-Employed) at Ed Turner LLB Limited
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My wife and I borrowed £400k in 2004/5 from a business

Customer Question

My wife and I borrowed £400k in 2004/5 from a business associate to invest in property. We have paid to date £600k in interest and capital to date.We have agreed a full and final settlement of £250K by July 2021. Unfortunately we were unable to complete the property sale due to COVID restrictions. We have now agreed on an offer. Now the lender is threatening us with bankruptcy proceedings. What can we do to defend us?
Submitted: 10 days ago.
Category: Law
Expert:  Ed Turner replied 9 days ago.

Hello.   I am Ed, a Solicitor qualified in England & Wales with over a decade’s experience in the legal profession advising clients.

I specialise in Commercial Contracts, Business Transactions, Employment, Dispute Resolution, Personal Injury and Road Traffic Law and shall be reviewing your legal problem today.

Regarding the site’s automatic offer of a Premium Service Phone Call, I shall be delighted to talk with you by phone to discuss your issue in greater detail if you accept the offer.

However, if you do not want a phone call, please cancel the offer for a Premium Service Phone Call and you will not be charged extra.

Expert:  Ed Turner replied 9 days ago.

To enable me to answer your query, please provide me with some further information.

Is this matter based in England and Wales or USA?

Can you afford to repay the lender or are you in finance trouble?

Expert:  Ed Turner replied 7 days ago.

I note that you have not replied to my request for further information.   I shall therefore post a “general answer” to your type of legal issue.    Please revert to me if I am mistaken as to your type of legal issue or if my answer does not fit the facts of your situation and I shall be delighted to amend my answer accordingly.

Expert:  Ed Turner replied 7 days ago.

I see three options for you.

Firstly, you can take out a consolidating loan to pay off your multiple creditors in one go and reduce everything to a single, affordable monthly repayment.   However, you may struggle to find a lender who will make this cost effective for you.   If you go to a “payday loan” company, that will drive you deeper into debt as their interest rates and repayment terms are extortionate.

Secondly, you can apply to make yourself personally bankrupt.   You can make the court application yourself online ( and will need to provide full details of your existing debts, income, and assets.   The court fee is currently £680 and all you will need to do is satisfy the court that you are unable to pay your debts as they fall due over the next 12 months.    You will be unable to borrow money for at least a year while the bankruptcy is administered, but your creditors will be unable to sue you through the civil courts for repayment of your debts.    Your existing cash and personal assets will be used to repay your debts as far as they are able.   Your unsecured creditors will only receive a few pence in the pound of what you owe.     Once the bankruptcy is discharged, this will have the effect of “wiping the slate clean” of all your debts and you will be able to borrow money again.   However, the fact that you were made bankrupt will remain on your credit record and it may prove very difficult in practice for you to obtain credit in future even long after your bankruptcy was discharged.

Third and finally, you can enter into an Individual Voluntary Arrangement (“IVA”) with your creditors if you owe over £6,500.00 and are struggling to make repayment.    An IVA is essentially a contract between you and your creditors that does not involve the court and is not as extreme as bankruptcy, whereby you agree to repay part of your debts.    An IVA can only be set up by an authorised Insolvency Practitioner (“IP”).   Their fees can be quite high, so make sure you ask how much they will charge before accepting their retainer.   The IP will work out what you can afford to repay and how long the IVA should last.  You will have to give full details of your assets, debts, income, and creditors.   Your IP will contact your creditors and ask if they will agree to the proposed terms of the IVA.   The IVA will start if the creditors holding 75% of your debts agree to it.   It will apply to all your creditors, including any who disagreed to it.   Your IVA will be added to the Individual Insolvency Register and removed three months after the IVA has ended.   However, the fact that you have entered into an IVA with your creditors will remain on your credit record and you may have to declare it before you request borrowing facilities from a new potential creditor for the rest of your life.   As a result, it may prove difficult to obtain credit in future.

Expert:  Ed Turner replied 7 days ago.

I am sorry that I do not have better news for you, but I must be as honest as possible with you to advise in your best interests.

I hope this resolves your enquiry.   Please revert to me if you require any clarification of my answer to your question and I shall be delighted to assist.

Kind regards


Customer: replied 7 days ago.
Hi Ed, Thank you for your responses. I was not able to respond to your original email as you were talking about a Premium Service Phone call and I did not know how to do that on my phone App.One of the other Solicitor's here was able to understand the issue and provide a comprehensive answer. Thank you for your assistance. Kind regards, Tim
Expert:  Ed Turner replied 7 days ago.

Thanks for letting me know, Tim.   I am pleased that you have received the advice you needed from another expert.   All the best with resolving this matter.  Regards.   Ed