Bounceback loans - Free year ending soon

[cwah]

Will repay monthly as it has been used. If at such time I'm out for work for a significant period of time, I'll fold the company and the loan with it.

I was planning to do the same with the crazy struggle I had to find a contract this year. But somehow I be in contract now so many I won't fold my company

[cwah]

I suspect some think that because the BBLs are government backed, they'll be easier to walk away from compared to traditional non-secured bank loans. I can assure people this is not the case - banks will have to show they have followed their debt-recovery processes, and failed to recover the loans, before they can reclaim any loss from the government.

That's expected they'll follow the process. However there isn't any personal liability, so unless there is fraud, the director isn't liable and can just walk away.

[jamesbrown]

That's expected they'll follow the process. However there isn't any personal liability, so unless there is fraud, the director isn't liable and can just walk away.

That really depends on whether they've upheld the terms of the loan and their fiduciary duties as a director or, for example, they've created a situation whereby illegal preference payments were made (e.g., to the director). Anyone who thinks they can just "walk away" from a debt is deluded and this applies to walking away from an insolvent business in general. An administrator or liquidator will always look at the reasons for insolvency and will seek to prosecute any misfeasance.

[cwah]

That really depends on whether they've upheld the terms of the loan and their fiduciary duties as a director or, for example, they've created a situation whereby illegal preference payments were made (e.g., to the director). Anyone who thinks they can just "walk away" from a debt is deluded and this applies to walking away from an insolvent business in general. An administrator or liquidator will always look at the reasons for insolvency and will seek to prosecute any misfeasance.

Yes but that's expected for any company that you fold... especially if you have debt.

Of course if you made illegal payment the director will be liable because it is... illegal.

But pay yourself salary and pension should be all good because it's all legal.

[jamesbrown]

Yes but that's expected for any company that you fold... especially if you have debt.

Of course if you made illegal payment the director will be liable because it is... illegal.

But pay yourself salary and pension should be all good because it's all legal.

Your "oh, you can just walk away" vibe is pish. The only conditionality you offered was "fraud", which is a misunderstanding. It may or may not be fine, depending on what you did. I bet you don't even know what a preference payment is, do you?

[cwah]

Your "oh, you can just walk away" vibe is pish. The only conditionality you offered was "fraud", which is a misunderstanding. It may or may not be fine, depending on what you did. I bet you don't even know what a preference payment is, do you?

No I didn't. I just read it through and it makes sense not to pay some relative instead of the creditor.

Although I still say if paying salary + pension as it was done the previous years should be fine because it wouldn't be preference payment.

[northernladuk]

Yes but that's expected for any company that you fold... especially if you have debt.

Of course if you made illegal payment the director will be liable because it is... illegal.

But pay yourself salary and pension should be all good because it's all legal.

Every time you post it's absolute crap and just causes more and more confusion. Just stop and think before you post FFS. Better still, just don't bother. You cause more problems on here that help.

[Paralytic]

No I didn't. I just read it through and it makes sense not to pay some relative instead of the creditor.

Although I still say if paying salary + pension as it was done the previous years should be fine because it wouldn't be preference payment.

I suspect a contractor who had no active or future contract at the time of taking out the BBL, and who then used the BBL to pay into their pension (eg, it was not paid from retained profits), might have some questions to answer should they then try to fold the company with the debt outstanding.

[jamesbrown]

https://amp.ft.com/content/8d7851c3-...3-235aeb1e5674

Ministers will crack down on company directors seeking to dissolve their businesses to avoid repaying creditors in a bid to prevent the loophole being exploited to write off state-backed emergency Covid-19 loans.

The Insolvency Service will be given beefed up powers to investigate and sanction directors found to have abused the process. The measures, which are part of bill put before parliament on Wednesday, will also give the government agency retrospective powers.

[BlasterBates]

That's expected they'll follow the process. However there isn't any personal liability, so unless there is fraud, the director isn't liable and can just walk away.

An insolvency process is not something where you "walk away". The government as a creditor will have the right to appoint a receiver, a very expensive lawyer will be appointed whose raison d'etre is to take you to the cleaners.