pip
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Post by pip on Mar 4, 2016 10:04:17 GMT
This business was clearly in no position to meet it's repayments. Where has the money gone?
For it to be so short of cash so soon after receiving a loan suggests that either a) the company was heavily indebted and that we are mugs that have refinanced an already defaulting loan, b) the company has had a horrifically bad downturn in trading (if this was the case hard to believe this wasn't known at time of issue) or c) the money has been taken out of the company to fund other projects (please no!).
Whether it's a,b or c the loan should never have been issued. While I understand totally that loaning out money is not a risk free enterprise, I am not yet assured that LC's assessments of loan applicants will not leave me too often exposed to similar scenarios.
The comments of Lord Turner a few weeks ago "The losses on peer-to-peer lending which will emerge within the next five to ten years will make the worst bankers look like absolute lending geniuses," were largely laughed at. I am not laughing.
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adrianc
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Post by adrianc on Mar 4, 2016 11:36:34 GMT
While I understand totally that loaning out money is not a risk free enterprise, I am not yet assured that LC's assessments of loan applicants will not leave me too often exposed to similar scenarios. The comments of Lord Turner a few weeks ago "The losses on peer-to-peer lending which will emerge within the next five to ten years will make the worst bankers look like absolute lending geniuses," were largely laughed at. I am not laughing. Are you extrapolating one swallow to an entire summer? If we compare LC's SME loans to FC's, this kind of scenario is hardly unknown. It's not even that rare - there have been plenty of similar shameful mess-ups. Does it shoot the entire model down? No. It says that the assessment perfect is not 100% perfect. IIRC, LC haven't ( yet...) had a single loan go south, let alone in a suspicious manner like this. It's only if we get a stream of these that we should start to become truly concerned - and, even then, just about that one platform. The unsecured SME loan market is a small part of P2P. FC have the vast majority of it - and they're busy making a cod of it in completely different and separate ways all of their own devising... Going back to the specifics of this loan... I think the amateur sleuthing done when this first started looking like it might go south demonstrated that it's almost certainly C, and that the borrower was economical with the truth regarding his wider interests.
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pip
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Post by pip on Mar 11, 2016 11:40:45 GMT
The loan is due to default this weekend. Let's hope there is no delay in the start of legal proceedings against the director who in the prospectus personally guaranteed it.
The guy has already proven that his word is worth nothing, so being messed about by stories of remortgaging etc will only make it harder for us to ever recover the money.
One lesson I have learnt with bad debtors is the tougher you play the more likely you are to get your money. The more 'cheque in the post' stories you fall for the more you are seen as a low priority person to be paid.
Who knows where our money went, or how the property development the director has is being financed....I will leave others to make up their minds.
What is for sure that unless LC shows how a) this sort of disaster won't be repeated and b) how our money is going to be recovered, then the chance of me lending on the site again is 0%. Why would I lend to somewhere where my defaults are greater than my interest returns?
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pip
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Post by pip on Mar 14, 2016 12:02:37 GMT
Why hasn't this gone into default yet, over 30 days overdue, due two months repayments.
Constant stream of promises from borrower that have not been fulfilled lead one to conclude that chances of recovery are remote and a default is required.
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registerme
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Post by registerme on Mar 14, 2016 14:29:14 GMT
I'm not happy with how this has played out either. That having been said, if it should be defaulted / will be defaulted, might it be better to wait a few weeks until we see how GO / HMRC etc deal with P2P and losses, when we might be able to offset losses against earnings?
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oldgrumpy
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Post by oldgrumpy on Mar 14, 2016 14:43:13 GMT
Would I be correct in thinking that we will not be able to claim default relief on interest tax returns just because a default has been declared?
Surely, we will have to wait until the platform declares that a defaulted loan is written off, i.e irrecoverable and actual loss has been suffered. I am nor sure whether that would include outstanding accrued interest.
I am hoping that all platforms will soon include an figure that we can use for losses on our tax return page.
I will be expecting AC to declare that plumber man funds are irrecoverable later in 2016. Loans which are in a "slow pay" recovery over many years may not qualify because recovery is still in progress.
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Post by pepperpot on Mar 14, 2016 15:02:37 GMT
I like how FC display and report Losses (practice makes perfect). From their figures you'll be able to declare the losses against income and any recoveries can be treated as capital gains. I'd be happy if that was adopted industry wide.
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baldpate
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Post by baldpate on Mar 14, 2016 15:26:12 GMT
I like how FC display and report Losses (practice makes perfect). From their figures you'll be able to declare the losses against income and any recoveries can be treated as capital gains. I'd be happy if that was adopted industry wide. Are you sure about that? My reading of the proposed HMRC concession is that if any of the loss used to offset income is subsequently recovered, that recovery is treated as income (and hence possibly subject to income tax) in the year of recovery.
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pip
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Post by pip on Mar 14, 2016 16:13:30 GMT
I'm not happy with how this has played out either. That having been said, if it should be defaulted / will be defaulted, might it be better to wait a few weeks until we see how GO / HMRC etc deal with P2P and losses, when we might be able to offset losses against earnings? Hi, You can make a claim on losses since April 2015, see www.gov.uk/government/publications/bad-debt-relief-for-peer-to-peer-investments/bad-debt-relief-for-peer-to-peer-investments. The definition of a bad or doubtful debt is set out in www.hmrc.gov.uk/manuals/pimmanual/pim2054.htm From the view of a consumer in P2P I would say it would be totally reasonable to use the sites assessment of a defaulted debt as meeting the criteria of a bad debt for HMRC purposes. Bad debt in year is offset against P2P income, recoveries are income in future years. Worth noting that bad debt in excess of income can be offset againt other P2P income, but not other income, however can be carried forward for up to 4 years. I think the industry will need to agree a standard methodology for defaulting loans, to bring the process fair and not subject to manipulation. I suspect HMRC will want to be across it too. The tax on P2P is getting complicated I worry how many members of the public will be able to apply these rules correctly?
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Post by nanniema on Mar 15, 2016 9:13:45 GMT
Getting back to the original point ie. ***M**********Ltd. It is now 2 months 1 week since the last payment.
What should have happened first thing Monday was - No payment received - start default proceedings - don't bother contacting debtor and listening to even more lies - do contact all relevant lenders and update them on the situation and how their interests are being protected.
What actually happened? We don't know because LC seem to have closed down their customer service dept.
They no longer use this platform to communicate even for the "new loans" post.
I know I should email them but honestly cannot see the point. It would probably be quicker to sell my investments on their SM.
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pip
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Post by pip on Mar 15, 2016 10:30:59 GMT
Getting back to the original point ie. ***M**********Ltd. It is now 2 months 1 week since the last payment. What should have happened first thing Monday was - No payment received - start default proceedings - don't bother contacting debtor and listening to even more lies - do contact all relevant lenders and update them on the situation and how their interests are being protected. What actually happened? We don't know because LC seem to have closed down their customer service dept. They no longer use this platform to communicate even for the "new loans" post. I know I should email them but honestly cannot see the point. It would probably be quicker to sell my investments on their SM. Well it's 2 months payments overdue, the late January payment was received less than 2 months ago. Not sure what you mean by 'start default proceedings', if you mean start legal action against the director who has guaranteed this loan, absolutely agree. Even if this guy is remortgaging what is to say he will use the proceeds to pay off this loan and not finance his property development or other businesses? That's why you need to put pressure on people like this, they generally pay up only when squeezed. Need to get a court order asap against this guy and hope he pays up so he doesn't get an outstanding CCJ against him.
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Post by lendingcrowd on Mar 15, 2016 10:36:47 GMT
Hi everyone, We appreciate your concerns, and we will update all investors who are invested in this loan by the end of today. nanniema - We always welcome emails from our investors. Please do not hesitate to email us if you would like to speak with us directly. Many thanks, LendingCrowd |
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ablender
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Post by ablender on Mar 15, 2016 16:08:22 GMT
lendingcrowdI'll take up your offer for email. Just sent one.
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registerme
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Post by registerme on Mar 15, 2016 17:43:04 GMT
Well, the recent loan comment was pretty clear  . |
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pip
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Post by pip on Mar 21, 2016 16:17:46 GMT
Come on lendingcrowd if this is not a default I don't know what is. Your rules say a loan is in default after 30 days being late. By your own admission this guy doesn't live up to his promises, so please default before the end of the tax year, so we can at least offset this against tax.
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