Many clients ask us whether they can deal with their personal guarantees themselves. The answer is yes, if you have the experience, expertise and the time to deal with all the issues arising.
But – this is why you might prefer to hand your problems over to us:-
The proposal settlements have to be packaged in a way which is clear and understandable to the Creditor. This enables them to properly consider a proposal. This takes experience you will not have unless you have worked in the insolvency industry.
In order to start negotiating you need to know:
- your position;
- what action the creditor can take,
- what the result will be for them in the form of a recovery,
- how long it will take
- what costs will be incurred by them to achieve it.
It is critical to present your income/expenditure correctly to take into account:-
- what is considered as taxable income, dividends or drawings from over drawn directors loan accounts
- your expenditure on what are classed as ‘essential’ as opposed to ‘non-essential’ items
- whether the repayment contributions that you are proposing are really realistic in the medium to long term.
Assets and liabilities also need to analysed and valued correctly
- This should be based on a comparison between “normal” market conditions and artificial ‘forced’ sale conditions which commonly occur when formal action is taken against you.
- The whole area of valuations is a complex one and experience is vital
- We need to consider what is acceptable as forced sale valuations to creditors?
- This can vary and experience is required to ensure that assets are not over or under valued.
- Incorrect valuations may undermine proposals – this can determine whether formal action is taken against you or whether too high settlement offers are made.
The proposal that is made to the creditor has to be based on a comparison of what they can achieve through alternate formal recovery procedures.
- This involves producing an Estimated Outcome Statement in the event of bankruptcy
- A knowledge of costs and fees charged during this process is essential to calculate the outcome correctly
- Unless you know what these are and how to calculate them you will not be able to do this.
We can help to adopt strategies to protect key assets such as family homes. Knowing what the other options that creditors could pursue can help us to do this. If key assets cannot be protected it is essential to maintain control and avoid the implementation of formal processes. This may result in assets being sold under market value which means you could lose out.
Call us to discuss your situation and we will do our very best on your behalf.