Can't get my head around this!

[charitynjw]

A friend had a small business - retail premises.

Due partly to the present economic situation, & also bad advice, it went belly-up & led to bankruptcy (1 year +).

Father originally signed as guarantor, using his house as surety.

About 65k left owing, & the business is probably worth about 70-75k. (from informal market research)

But the bank, who have some kind of controlling interest, say no, they want minimum 85k.

Absolutely no interested potential buyers at this inflated price.

Why would the bank not want their money back?

[garlok]

Re: Can't get my head around this!

Cause they have a guarantee at or above that inflated price.

[charitynjw]

Re: Can't get my head around this!

Hi Garlok,

Why would they rather have the money tied up in bricks & mortar, to all intents & purposes unreachable for the foreseeable future, than play nice & have 65k in their skyrocket within weeks?

[garlok]

Re: Can't get my head around this!

They can play the long game with you. It is banks we are talking about and their logic is not ours. And depending on how the guarantee is set up could just realise the assets on the security. The guarantor will have no leg to stand on if they foreclose. Why bother to try and sell? ttheir money is to all intents and purposes safe plus outstanding amounts will accrue charges and interest.

[charitynjw]

Re: Can't get my head around this!

Thanks for that, Garlok (I think!!)

Further complication - father recently deceased, will in place, 3 beneficiaries (children, all over 18) - one of them is my friend (see above).

So, bank now has control over business premises, plus 1st call on the estate, I guess.

Now, if this was you...............

[garlok]

Re: Can't get my head around this!

problem m8!

The executor(s) of the estate have a legal obligation to deal with all liabilities and responsibilities of the estate before any payment is made to beneficiaries. The banks like the Revenue actually employ people to study "the Hatched, Matched, and Despatched" columns and the Registrar's notices to ensure full claims are made on estates (in many cases fraudulently i.e. trying it on, hence anyone executing a will or estate has to have their wits about them). From details given I would assume that the bank will pursue the full value of the guarantee next in line after HMRC and Funeral Director. Only the remaining residue will be available for distirbution to beneficiaries.

Garlok

[charitynjw]

Re: Can't get my head around this!

Thanks again, Garlok.

'Curlies' & 'short' spring to mind!

& they (bank) knew that the father was ill, with limited income.

Vultures!

[CleverClogs (RIP)]

Re: Can't get my head around this!

Hast thou forgotten the Gospel according to St John, Ch. 18, verse 40?

Now, Barabbas was a banker.