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And so it begins.....BBL repayment

Don't pay/Can't pay

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So, apart from the very obvious fraud where a company had taken a BBL with no intention to repay, what happens in other circumstances:

1. Company ceases to trade as business cannot continue, no Director loan issues - I guess no problem?

2. Company - business assets sold, Director owed over £ 150k by company, BBL £ 40k, takes loan to repay his debt?

3. Company continuing to trade, but will not be able to repay - MVL? 

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By zebaa
11th Mar 2021 13:33

q1, yes, I think so. q2, preferred creditor ? Most likely no come back though. q3, CCJ & liquidate so bank gets guarantee ? In all this we will just have to wait & see though.

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By Roland195
11th Mar 2021 13:40

Bounce Back Loans were hastily conceived early last year in response to the banks quite rightly laughing at the earlier draft HMG threw together then we went in for another extended period of lockdowns, national & local, tiers and restrictions to trade. The Insolvency Service will not be able to review a fraction of the most obvious fraud cases even if we in the profession point it out with our incredibly useful reports.

I suppose each case will have to be on it's own merits & subject to the usual insolvency rules - avoiding preferential payments to creditors etc.

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By Duggimon
11th Mar 2021 13:51

1: insolvency, provided director isn't personally on the hook then all the assets go to the creditors and the business is wound up.

2: See 1, provided nothing untoward has gone on. If the company was already insolvent, or in danger and the director took out all the money in advance of insolvency proceedings, they may be paying it all back as part of the process.

3: You can't do a MVL with debts outstanding that you can't repay. If there's debts outstanding you can't pay then that's an insolvency again.

In all cases the bank seeks redress form the company first, then will be reimbursed by the government I suppose. If there's no personal guarantee from the director then they will not be liable, though they may find themselves repaying money taken out of the company.

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A Putey FACA
By Arthur Putey
11th Mar 2021 14:50

If the government was smart it would set up a test and trace scheme for BBL defaulters, but I doubt it has any money left.

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Replying to Arthur Putey:
Hallerud at Easter
By DJKL
11th Mar 2021 15:08

I though I read somewhere, possibly A Web itself, that HMRC were recruiting for teams to investigate claims etc made to various schemes that were created re Covid, maybe these will be in the mix.

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Replying to DJKL:
A Putey FACA
By Arthur Putey
11th Mar 2021 15:24

Ideal part time work for accountants perhaps?

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By bernard michael
11th Mar 2021 17:49

It is insolvent under version 3

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