F
far2fast
Guest
I have debts built up from property based investments and business related loans. Now I don't own the property the business trades on my retired/widowed parent does but I own the business. To get the loans my parent who was at retirement age put some property up as security and signed a personal guarantee which was meant to only relate to that piece of property unfortunately bad advice was given from my solicitor who also acted for my parent.
I am now in a situation where half my debts are on tracker and are being repaid no defaults. And half my debt is on interest only from a bad investment that is on demand.
Problem is the bank 2 years ago changed my loan interest on the investment loan everytime I reduced the balance the interest rate went up. I still keep paying the interest. I have asked they put this over 20yrs so i can repay them. Their answer is that my business cant afford to repay it. My issue is what Ii am repaying now in interest is the same as what a 20 yr repayment loan is if i get a slight interest rate reduction to closer to what i was orginally on.
The bank say I can have an interest rate reduction on the bad loan only if my parent gives the bank all their property excluding the family home. So I got excited and asked will this be a repayment loan over 20yrs to which they replied no it will be interest only and on demand and then when my business is stronger they will renegotiate and put it on 20yrs repayment but no guarantees over the interest rate for more than 1 year.
How can i do business like that. Its so bad now that my parent is considering selling the property the bank has a mortgage over and some other assets to repay my interest only loan. So i can continue paying the tracker loans. But my parent will not mortgage any more property to the bank.
I can't see the bank accepting this as all loans are cross secured and may just call in the personal guarantee as the remaining loans will be based on some property I own personally which is in negative equity.
But for me I feel I have ruined my parents retirement as they will die in debt due to a PG. If my parent passes the property to me I know as soon as my business is going well they will increase the interest rate so I can not afford to repay it so I will be trapped until the tracker stuff is paid. And if my business does not do any better in a few years they will call the loan and sell me out. Either way no way can I see a way out.
Is there any way of negotiating my parent out of the pg by them paying off the interest only loan and selling the property the bank have while they retain the rest of the property. As that would mean my business has the repayment capacity to service the remaining loans but the bank would have less security.
As far as I can see its a real chicken and egg situation. All advice welcome and sorry for not being more exact on the figures but total loans today are between 500k and 1 million
I am now in a situation where half my debts are on tracker and are being repaid no defaults. And half my debt is on interest only from a bad investment that is on demand.
Problem is the bank 2 years ago changed my loan interest on the investment loan everytime I reduced the balance the interest rate went up. I still keep paying the interest. I have asked they put this over 20yrs so i can repay them. Their answer is that my business cant afford to repay it. My issue is what Ii am repaying now in interest is the same as what a 20 yr repayment loan is if i get a slight interest rate reduction to closer to what i was orginally on.
The bank say I can have an interest rate reduction on the bad loan only if my parent gives the bank all their property excluding the family home. So I got excited and asked will this be a repayment loan over 20yrs to which they replied no it will be interest only and on demand and then when my business is stronger they will renegotiate and put it on 20yrs repayment but no guarantees over the interest rate for more than 1 year.
How can i do business like that. Its so bad now that my parent is considering selling the property the bank has a mortgage over and some other assets to repay my interest only loan. So i can continue paying the tracker loans. But my parent will not mortgage any more property to the bank.
I can't see the bank accepting this as all loans are cross secured and may just call in the personal guarantee as the remaining loans will be based on some property I own personally which is in negative equity.
But for me I feel I have ruined my parents retirement as they will die in debt due to a PG. If my parent passes the property to me I know as soon as my business is going well they will increase the interest rate so I can not afford to repay it so I will be trapped until the tracker stuff is paid. And if my business does not do any better in a few years they will call the loan and sell me out. Either way no way can I see a way out.
Is there any way of negotiating my parent out of the pg by them paying off the interest only loan and selling the property the bank have while they retain the rest of the property. As that would mean my business has the repayment capacity to service the remaining loans but the bank would have less security.
As far as I can see its a real chicken and egg situation. All advice welcome and sorry for not being more exact on the figures but total loans today are between 500k and 1 million