Case Studies
DISCLAIMER : PLEASE NOTE THAT THESE ARE EXAMPLES AND SHOULD NOT BE TAKEN AS REPRESENTATIVE AS TO A POTENTIAL OUTCOME AS EVERY CASE IS DIFFERENT (for example, we have been engaged to negotiate a repayment plan where there was no element of write-off). NO OUTCOME CAN BE GUARANTEED.
Case Study 1: Director’s personal guarantee (write-off 99%)
Case Study 2: A company avoids insolvency (write-off 72%)
Case Study 3: A great result on a secured personal guarantee (write-off 40%)
Cast Study 4: A claim under the Enterprise Finance Guarantee (EFG) scheme (write-off 80%)
Case Study 5: Settlement on an overdrawn director’s loan account (write-off 50%)
Case Study 6: Help from family avoids bankruptcy (write-off 61%)
Case Study 7: Husband and wife go bankrupt (write-off 100%)
Case Study 8: Tradesman made bankrupt (write-off 100%)
Case Study 9: Another secured personal guarantee (write-off 50%)
Case Study 10: Vulnerable client gets great result (write-off 81%)
Case Study 11: Bankruptcy under a Power of Attorney (write-off 100%)
Case Study 12: Client avoids bankruptcy for HMRC debt (write-off 68%)
Case Study 13: Widow keeps the family home (write-off 46%)
Case Study 1 – Director’s personal guarantee
We were referred an individual who had received a demand from a bank for £300,000 under a personal guarantee following the liquidation of his business. We were engaged to negotiate a full and final settlement on this liability.
On engagement, we wrote to the bank requesting the supporting documentation in relation to this claim in order that we could perform due diligence and ensure all was in order. To our surprise, we received several personal guarantee documents which totalled £1.8m.
Given our collective banking experience, we knew that it is standard banking practice to retain personal guarantee documents on file long after the debt is repaid and the accounts closed, so we took the view that the bank had so far only demonstrated they held security. We requested proof of debt in the form of the relevant Facility Letters and bank statements and a large bundle of documents was delivered to our office.
After spending a significant amount of time carefully going through the documents, we realised that none of them were connected and initiated a discussion (by letter) with the bank around the legal points which highlighted the weakness of their position.
After 6 months of this, a rather frank and open telephone conversation occurred where we laid out the futility of their position should they decide to litigate. Our client wished to avoid a protracted litigation and as such, we made an offer in full and final settlement (and without acknowledgement of any liability on the part of our client) for £10,000. After considering our arguments, the bank made a counter offer of £20,000 which our client duly accepted.
Summary:
Claim = £1,800,000
Write-off = £1,780,000
Case Study 2 – A company avoids insolvency
We were referred to a company who was in dispute with one of their trade creditors who were about to crystalise a £942,000 debt on their balance sheet. Should this have happened, this would have made the company insolvent and it would have been liquidated.
The impact of this debt would have had further consequences as it would have resulted in the failure of 2 connected businesses and the loss of a number of jobs. Furthermore, the director had provided a personal guarantee of £250,000 which would have resulted in his bankruptcy should it have been called upon.
We were duly engaged by the client company to negotiate a full and final settlement to avoid insolvency.
We performed our due diligence on the (substantial) documentation provided and we analysed the financial situation of both the business and director and presented a commercial argument based around the likely outcomes of litigation. The creditor eventually accepted the sum of £264,000 in full and final settlement of all outstanding liabilities and duly released the director from his personal guarantee.
Summary:
Claim = £942,000
Write-off = £678,000
Case Study 3 – A great result on a secured personal guarantee
We were referred an individual who had received a demand from a bank for £368,522 under a personal guarantee following the liquidation of his business. We were engaged to negotiate a full and final settlement on this liability which was secured on his house.
On engagement, we wrote to the bank requesting the supporting documentation in relation to this claim in order that we could perform due diligence and ensure all was in order.
Our client wanted a swift resolution. From experience, we know the longer and harder we negotiate, the better the result we can normally achieve. In this instance, we were able to negotiate a saving of £148,000 and agree to have the charge over his property removed.
Summary:
Claim = £368,522
Write-off = £148,000
Case Study 4 – A claim under the Enterprise Finance Guarantee (EFG) scheme
We were referred an individual who had received a demand from a bank for £75,000 under a personal guarantee backed by the Enterprise Finance Guarantee scheme. He had recently had a stroke and needed help in getting the issue resolved.
On engagement, we wrote to the bank requesting the supporting documentation in relation to this claim in order that we could perform due diligence and ensure all was in order. We found that there appeared to be irregularities in the execution of the agreement with the client claiming it had been mis-sold.
After a lengthy negotiation process with the lender, we eventually had to escalate the matter in order that the allegation of mis-selling could be looked at in detail.
After 2 years and 3 months of work, the complaint was resolved in favour of our client and a fantastic settlement was achieved.
Summary:
Claim = £75,000
Write-off = £60,000
Case Study 5 – Settlement on an overdrawn director’s loan account
We were referred an individual who was being pursued by a liquidator for an overdrawn director’s loan account to the tune of £72,442.06 with lawyers instructed by the creditor.
We contacted the lawyer acting on behalf of the liquidator who advised that we were the latest in a “long line of professionals” that had been engaged to act in this matter. We were then advised that if full payment of the claim was not received in just under a week, they would commence litigation.
We advised the claimant’s representatives that we would robustly defend any legal action and that we felt any petition to bankrupt our client would fail. We were then told that they would look at securing the debt on our client’s property by way of a Charging Order and re-stated their deadline.
Just under 8 months after this conversation, we achieved a settlement that our client was delighted with.
Summary:
Claim = £72,442.06
Write-off = £36,314.44
Case Study 6 – Help from family avoids bankruptcy
We were referred an individual who was as left with a mixture of personal guarantee debt and consumer credit debt following the collapse of his business which totalled £139,087.40.
After performing an analysis of his personal financial situation, it appeared that the only course of action open to him would be to declare himself bankrupt. Despite having no income or assets, our client was determined to avoid bankruptcy as his brother was willing to provide lump sums to settle off his outstanding liabilities.
We engaged with creditors and over time we were able to negotiate full and final settlements which provided the creditors a far greater dividend than would have been achieved in bankruptcy, as well as delighting our client.
Summary:
Claim = £139,087.40
Write-off= £53,876.86
Case Study 7 – Husband and wife go bankrupt
We were referred an individual who had experienced a challenging time following the breakdown of his marriage and had amassed significant personal debt totaling £116,311.33.
After performing an analysis of his personal financial situation, it was clear that bankruptcy was the only viable solution. Our client was extremely reluctant to consider bankruptcy as he thought that he had the potential earnings capacity to repay his creditors (he was a self-employed consultant). We were engaged on the basis that we would negotiate settlements with his creditors if he could generate the funds to do so, or walk both him (and his soon to be ex) wife through bankruptcy if this was not possible.
We worked with the creditors and explained the position. They were happy to accept the token payments offered by our client (with regular reviews) in the hope that our client could win one of the contracts he was bidding for. Alas, this proved not to be the case and bankruptcy was the only alternative.
We prepared the Statement of Affairs, booked the court date and attended court with our client when he presented a debtor’s petition for bankruptcy. We remained on retainer until he was discharged.
Some months later, his ex-wife was ready to go through bankruptcy as there were significant joint debts following the earlier repossession of their property which she was now solely liable for. By this time, the new online process with the Insolvency Service had started, so we completed the application for her and again remained on retainer until her discharge 12 months later.
Summary:
Claim = £116,311.33
Write-off = £116,311.33
Case Study 8 – Tradesman made bankrupt
We were referred an individual who had a business with his son supplying and fitting bathrooms. Despite being a partnership, the debts were in his sole name and there were some 51 separate debts (most of which were trade suppliers) totaling £424,620.99.
Our client originally planned to sell his home and to use the net sale proceeds to negotiate full and final settlements with his creditors. This was a tough ask as it would only take 1 creditor not to cooperate and it would result in bankruptcy. Shortly after our engagement, one of his creditors did indeed issue a Statutory Demand.
We worked with all his creditors over several months in order to reach an amicable conclusion. Unfortunately, there were significant problems with the property which meant that the value was considerably less than first thought and as such, a negotiated settlement would not be possible.
Eventually, the creditor who had previously issued the Statutory Demand eventually lost patience and petitioned for our client’s bankruptcy. Our client decided he wasn’t going to fight the petition and was duly made bankrupt.
We subsequently prepared the Statement of Affairs and attended the interview with the Insolvency Service. We remained on retainer until he was discharged, responding to queries from the insolvency Service.
Summary:
Claim = £424,620.99
Write-off = £424,620.99
Case Study 9 – Another secured personal guarantee
We were referred an individual who had received a demand from a bank for £181,592.65 under a personal guarantee following the liquidation of his business. We were engaged to negotiate a full and final settlement on this liability which was secured on his house.
On engagement, we wrote to the bank requesting the supporting documentation in relation to this claim in order that we could perform due diligence and ensure all was in order.
Our client wasn’t too concerned about how long the process took, but more concerned with getting a good result (from experience, we know the longer and harder we negotiate, the better the result we can normally achieve). In this instance, we were able to negotiate (over an 11 month period) a saving of £89,500 and agree to have the charge over his property removed.
Summary:
Claim = £181,592.65
Write-off = £89,500 (50%)
Case Study 10 – Vulnerable client gets great result
We were referred an extremely vulnerable client who was in a very fragile state. Following the liquidation of his business and the subsequent ending of his relationship, our client had a breakdown and then attempted suicide.
There was a mix of consumer credit debts, personal guarantees, and a claim for an overdrawn director’s loan account in the liquidation of his business. The total indebtedness was £111,421.65.
With no assets or income, it seemed that bankruptcy would be the only solution open to him. However, third parties stepped forward and were prepared to make a lump sum available to negotiate a full and final settlement with his creditors.
After a delicate negotiation process, we found that the majority of creditors were very understanding once we made them aware of the circumstances and the delicate mental state of our client. In the end, we were able to achieve an outstanding result.
We are delighted to say that our client has subsequently got himself back on his feet and is now doing very well.
Summary:
Claim = £111,421.65
Write-off = £90,872.18
Case Study 11 – Bankruptcy under a Power of Attorney
We were referred a client who lived overseas, but whose father was in full time care here in the UK. Our client’s father had a business which had closed leaving significant personal liabilities and our client felt that bankruptcy was the most appropriate action.
Our client held a Power of Attorney to deal with all aspects of his father’s affairs. He attempted to present a debtor’s petition for bankruptcy himself, but this was dismissed by the court.
When we were engaged, the new online bankruptcy application with the Insolvency Service had become active. We were engaged to prepare the application and liaise with the Adjudicator at the Insolvency Service to ensure a Bankruptcy Order was indeed granted.
We were successful and continued to remain on retainer during the period of the bankruptcy to answer any questions our client had and assist with any queries raised by the Insolvency Service.
Summary:
Claim = £70,008.56
Write-off= £70,008.56
Case Study 12: Client avoids bankruptcy for HMRC debt
We were referred a client by their accountant who (for personal reasons) fell behind with his tax returns and was facing a large bill for Self-Assessment Tax. This had escalated to the point where a Statutory Demand had been issued and the client was facing bankruptcy.
On engagement, we made HMRC aware of the personal reasons for the client ending up in this position. Initially, HMRC were not interested in negotiating, but once we stressed the vulnerable position the client was in, were then able to initiate a dialogue and work with them to achieve a result both parties could live with.
Having now put all this behind him, our client is looking forward to getting his life back on track and planning for the future.
Summary:
Claim = £93,664.57
Write-off= £63,664.57
Case Study 13: Widow keeps family home
We were referred a client by an insolvency practitioner following an enquiry from a probate lawyer.
Our client’s husband had sadly passed away leaving significant debts, not only in relation to his failed business, but to HMRC as well as some credit cards, a car lease etc. He had an investment property in his sole name, but unfortunately the sale of this did not realise enough to settle all the claims of the estate.e
When we were engaged, the creditors were threatening to declare the estate insolvent in order that the family home (which was in joint names) could also be sold in order to discharge the debts (unfortunately, there was no life insurance in place). Clearly, this was an extremely distressing time for our client.
I am delighted to say that we were able to work closely with all the creditors and managed to achieve settlements that not only saved the family home, but left some cash from the sale of the investment property to help them rebuild their lives.
Summary:
Claim = £184,031.62
Write-off= £85,413.90