Can someone please answer a simple questionfor me? Bailffs due tomorrow......

[badger123]

So my partner took a loan out with one company in 2018. He cant afford to pay it back. Its unsecured and for £140k at 36% pa calculating daily. The bailiffs have now been instructed by a company that isnt the same company with whom he has the loan. That company is showing as dormant on Companies House. The Director of this company is a Director of both companies but the recovering company isnt mentioned on the contract.
So my question is - can a dormant company lend money to someone whilst its dormant?
Am also assuming that they would need to be active to recover and thats why the Director is sending in the bailiffs under his other company name which is active?
Bailffs are due tomorrow and need to be prepared!!
Thanks in advance

[Amethyst]

Is there a court judgment in place ?

[badger123]

Hi!! Thank you for coming back to me!
No, there is no Court Judgement in place. I was going down the route of the company the bailiffs have been instructed by isnt a company that is a party to the contract. Its not named and the director signed on behalf of the other company that is a dormant company and was at the time the loan was given. Ive asked the Bailiffs to send a copy of the Loan agreement that shows my other half entered into a contract with the company they have been instructed by. Im guessing that if they cant provide one, which they cant, and a dormant company isnt dormant if its lending money, then they cant act. (I know... I said this was simple right!??!)
I am now wondering if this an unregulated unsecured loan? Is that a thing? My partner took it out to cover his living costs whilst he was working on a project from which it would be repaid on completion of the project. No where in the contract does it say what it was to be used for only how much, the interest payable and the date by which its payable. He hasnt signed anything that waives his rights under the CCA. No where in the contract does it allude to what it is to be used for.
The 3rd question is if its unregulated - do they have to use the courts for recovery or can they just turn up and take everything?

[Amethyst]

Who is the lender ? £140k is a lot for an unsecured loan - is it really that much it is that a typo ?

They cant send bailiffs without a court order. What have the company actually said ?

[badger123]

Ok - so the dormant company that lent the money is called Principle Management Ltd. Its definitely £140k. Its definitely unsecured. My OH says the chap told him it was his own money and he didn't query why the agreement was with a company on the paperwork when he signed. Then DCBL bailiffs have sent a letter saying they are coming to take goods for Cambridge Fintech Ltd, no CCJ etc. The same chap is a director of both companies but Principle Management Ltd is a dormant company. Hes not a licensed lender. I'm lost to be honest.

[Amethyst]

Neither company is listed as dormant. PM was dormant st last set of accounts but is now active.

If you do have a copy of the agreement it would be useful to see it. As would the letter from DCBL. ( retract any personal details) - is it titled ' legal recovery action' / ' notice of debt recovery ' ? The agreement has the PM name on it ?

Was the project your partner was working on for one of the companies or the man that lent him the money ? Initials ZC ?

Check the judgment register as to whether there is a CCJ. Regulated or unregulated there still needs to be a judgment for bailiffs to be instructed.

Does your partner own property ? Could the loan be secured against that without him realising ?

[badger123]

On Companies House PM is active but as a dormant company is that not the same thing as a dormant company then?
No, the project was his own, he just ran out of cash to support himself.
No definitely no charges and cant find a CCJ either.
Yes the agreement has the PM name on it and is signed by the Director.

[efpom]

It's a dormant company - https://beta.companieshouse.gov.uk/company/10310411

i.e. Not Trading - but can still sue for debts due to it. However, that begs the question here - Is there a judgment against the debtor?. Is there a warrant of execution, as a result? If not, no bailiff has the power to do anything!

This dormant company has never traded, but the loan agreement is evidence of some form of trading. That state of affairs raises more questions than answers.

[Amethyst]

The company is active, just the trading category as dormant.

Anyway, Cambridge Fintech are nothing to do with it, there's no judgment that we are aware of and the bailiffs have no warrant - I'd like to see the letter DCBL have sent.

But looks like the loans need sorting out somehow. It seems there were 5 original loans that were due to be paid in June 2018, but weren't due to the project overrunning, so this document is an overall extension to the 5 loans.

3. This Loan will be repaid in full on or before the respective maturity dates, which are seven months after the Loan Extension Start Dates as specified in Section l, or upon the sale of the fifth flat out of the eight flats at xxxx

is ambiguous - should have a 'whichever is sooner' or something... presumably the project was building/converting the flats and selling them ? There doesn't seem to be any security against the flats, just that the loan will be paid when the 5th of the 8 flats is sold. It's a terrible agreement. I wonder if the original 5 separate agreements were any better ( as this seems to just be the terms of extension ). It would likely be seen as a business loan arrangement, not a consumer credit loan, although it isn't clear if the monies were intended to fund the 'project'.

[badger123]

Hi all,
There is absolutely no security with this loan, not even with the initial 5 loans. The contracts for those are virtually the same as these and no purpose is set out.in them either. The flats are now in LPA receivership (long story involving an ex wanting lots of money). My OH has now given me the DCBL letter. It says 'we will commence recovery action' which hes panicked and assumed meant the heavies were coming in.
So this morning Ive emailed DCBL bailiffs and asked them to supply a copy of the loan agreement with CamFin as proof that he owes a debt to the company that has instructed them knowing full well there is no contract. DCBL have also assigned £5k of fees to the case and suddently he owes £258k. If they then pursue it I'm guessing we can go to court and maybe try to get it voided as he has no contract with Fintech? Or take on the fact PM is dormant and has been declaring no trading? Smacks a bit of money laundering to me all this maybe SFO?
This started as a simple question ..... yikes!
Thankyou all once again!

[Amethyst]

Aye, simple questions never end up being simple xx. DCBL will just be acting as debt recovery agents - the case would have to go to court before any enforcement action could take place so you don't need worry about bailiffs coming to take stuff ( have to be a lot of stuff to cover £140k ). If the company do issue a claim then you will need to consider defence. If it's issued by Cambridge Fintech then it would be a strike out application as they are not the lender and have no cause of action unless there has been a legal assignment of the agreement. If issued by PM it will be another case of defending. Has your partner gone bankrupt himself or just the development project ? If he has then this loan should be included in that.

[badger123]

Hey! No he hasnt gone bankrupt (yet). He has quite a bit of equity in this property but in control of the recievers. They are LPA receivers, not administrative receivers. I'm looking at these next. Whole other ball game - things like they kicked him out of his flat in the building without a possession order, theyve taken control of the freehold over which they have no charge, they cant account for money that has come in via the rental of two other flats over the last 18 months, they wont respond to an SAR request... nightmare, total bad dream central!
Thank you once again! Its so nice having someone to ask. I try and work things out but Ive no idea if Im on the right track and he cant afford a lawyer.

[efpom]

Beginning to look like the LPA receivers? or/ Cambridge Fintech Ltd have retained bailiffs to recover goods which always belonged to Cambridge Fintech Ltd, and which are in your friend's possession. Presumably, those are project goods, not goods owned by your friend.- Computer goods?

One problem with your friend's problem, is that you are relaying information from your friend to you, and then to this board. It might be worthwhile asking your friend to set out a summery of the facts, for publication. Otherwise, contributors are answering 'in the dark' so to speak

[badger123]

Ok - to clarify the facts are:
OH buys a house using a Buy to Let mortgage and converts it into 8 flats. He runs out of money to support himself half way through. He borrows money from a chap who is a Director of the dormant company PM Ltd for his living costs and to pay off his X. The chap tells him its his own money he is lending him and OH never queries why the loan is then between him and PM Ltd.. PM Ltd is a Dormant company and always has been. No goods, no services, just a loan for living costs.

He runs out of money again as the X makes more demands. This time the mortgage company bring in LPA receivers - this is different to the chap who lent him the 140k, and another issue to try and sort out but aside from this.

The chap who lent him the 140k is also a Director of CF Ltd. CF Ltd company have instructed bailiffs to recover the loan of £140k where the parties to the loan are PM Ltd and my OH only, not CF Ltd. PM Ltd had they been trading should have instructed the bailiffs for recovery not CF Ltd as they are not a party to the debt which is not secured on anything.

Does that help?

[Amethyst]

PM couldn't instruct bailiffs without going to court first ( neither could CT )