rscal
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Post by rscal on Apr 4, 2019 9:54:07 GMT
I have sold my holding in a loan #181 to zero but have accumulated unpaid interest. (In the meantime, the loan is suspended and on a six month interest repayment holiday.) Question is, when repayments commence willl back-interest like mine be paid up first? Second, if the loan were subject to recovery (I'm showing my ignorance here) at some point would principal repayment take precedence over unpaid interest? Thnx.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Apr 4, 2019 11:09:29 GMT
I have sold my holding in a loan #181 to zero but have accumulated unpaid interest. (In the meantime, the loan is suspended and on a six month interest repayment holiday.) Question is, when repayments commence willl back-interest like mine be paid up first? Second, if the loan were subject to recovery (I'm showing my ignorance here) at some point would principal repayment take precedence over unpaid interest? Thnx. Payments are applied to the oldest outstanding sum first usually so if/when they resume they should pay off oldest capital/accrued interest first unless an alternative priorty has been agreed (eg Aber Hotel was only paying capital arrears under repayment plan)
In recovery, principal repayment always takes priority over accrued interest as per AC t&cs 12.3 (after recovery costs & AC fees)
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sl75
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Post by sl75 on Apr 4, 2019 12:18:25 GMT
As I recall, aber hotel arranged for interest arrears up to the point that trading had been suspended to be cleared before then switching to capital repayments.
That's probably as it should be - any accrued interest up to the point that trading was suspended (which has no voting rights) taking priority over any overdue payments from after the point that trading is suspended (where accrued interest is always proportional to capital holdings)... but is that always the case?
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rscal
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Post by rscal on May 22, 2019 10:00:04 GMT
Here's a different scenario. Today #282 - suspended loan in administration repaid some principal (1%ish) but none of the arrears of interest. I assume that is per the process laid down. Now AC are charging default rate of interest and it's mounting up rapidly. I assume (based on LTV) they are hopeful that receipt both principal and (then?) interest are viable at this stage?
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Post by Ton ⓉⓞⓃ on May 23, 2019 17:59:53 GMT
Thinking about#282, when I last checked AC T's&C's it said that capital would be paid first then interest where it's in Admin. The idea being that Users are more likely to be liable to tax on the interest but not on the capital in most circumstances (written before tax loss offset on interest). But as said already we could agree a different schedule though unlikely in this case as hopefully 282 will be fully repaid, with a low ltv.
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cwah
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Post by cwah on May 24, 2019 19:15:11 GMT
Here's a different scenario. Today #282 - suspended loan in administration repaid some principal (1%ish) but none of the arrears of interest. I assume that is per the process laid down. Now AC are charging default rate of interest and it's mounting up rapidly. I assume (based on LTV) they are hopeful that receipt both principal and (then?) interest are viable at this stage? Are you saying you recovered 1% of your capital on a defaulted loan? is it frequent?
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