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What is a logbook loan?
Logbook loans involve taking out a loan against the value of your car. Although they are technically a secured debt, they don’t have the same level of security compared to the kind of finance agreement that’s available from your bank or a loan company.
A logbook loan is usually used to borrow small amounts of money, however it has a much higher risk than other debts. Your credit score will be negatively impacted, you might lose your car and you’ll have additional interest and charges to pay back on top of the original loan.
A logbook loan is not recommended to use to pay off other debts. Usually, logbook loans are very expensive and the interest rates could be as high as 450%. A logbook loan is usually a last resort, however we do not recommend taking one out because of the high charges and risks it comes with.
Worried about your Bounce Back Loan?
If you are worried about how you are going to repay your Bounce Back Loan, we’re here to help you! There are many people who will find themselves in a financial struggle after taking up the option of a Bounce Back Loan. Here at Business Helpline, We can discuss all of your options and help you plan for a better future.
Call our team today on 0800 088 2142.
What are the dangers of a payday loan?
A payday loan usually comes with extremely high interest rates. Not only that, but if you can’t pay back the loan in the agreed timeframe, it can lead to penalties and more fees being added on.
Another danger of the payday loan is that it usually comes with short repayment dates. Although there are a few companies out there that may allow you to have a few months, most payday loan companies will only give you until the end of the month or your next payday to pay them back.
Payday loan companies are also given direct access to your bank account. This means that your bank information may be shared with hundreds of other companies and they may attempt to take hidden fees straight from your bank account.
What are the risks of a secured loan?
▪️Has the potential to lose assets: If you don’t make on-time payments every month, you could face losing your collateral, whether that is your home or car.
▪️Not as flexible for borrowing: Some unsecured loans, like personal loans, allow you to spend the borrowed money on whatever you’d like. Specific secured loans are generally tied to the collateral you’re putting up. For instance, a mortgage is tied to your home. Your auto loan is tied to the vehicle you’re buying.
How do you claim redundancy?
You must make claims for director redundancy through the Redundancy Payments Service (RPS). You will be paid with money from the National Insurance Fund if you are eligible for redundancy.
What is insolvent liquidation?
Generally, there are two main types of insolvent liquidation procedures. The first is Compulsory Liquidation and the second is a Creditors’ Voluntary Liquidation (CVL).
A compulsory liquidation happens when a creditor, or more than one creditor, petitions to the court for your company to be forced into liquidation. This will be achieved by putting together a winding-up petition (WUP) against your business.
On the other hand, a CVL is when the liquidation process is voluntarily started by directors within that insolvent company. They usually enter this process because of intense pressure from creditors, leaving directors concerned with nowhere else to go. An insolvent company would hire an insolvency practitioner and they would take control of the whole process – talking to creditors and facilitating the process of selling assets to repay creditors.
A Creditors’ Voluntary Liquidation, is when the liquidation process is started voluntarily by the directors of an insolvent company. This process is usually entered into because increasing creditor pressures leave the director nowhere else to turn. The insolvent company would appoint an insolvency practitioner who would then call a meeting of the company’s creditors and facilitate the process of selling the company’s assets to repay creditors. Can I claim redundancy if my company isn’t in, or isn’t facing liquidation?
You cannot claim redundancy if your company is not facing liquidation.
Employees would not be able to claim redundancy while in employment so, with that in mind, a director can only claim redundancy when their company is in the process of going insolvent. Redundancy is designed to help those who have found themselves out of a job as opposed to helping those who simply want to quit their job.
Therefore, directors cannot seek redundancy in a solvent liquidation as this is seen as putting themselves out of work. There is a choice involved. Redundancy is to help those who lose their job without a say in the matter.
When can a claim be made for director redundancy?
Timescales are strict for redundancy both before and after liquidation. You have to start the process within 12 months of your company entering liquidation, or before your company is liquidated. The longer that you leave claiming, the more challenging it is to be successful in your pursuit. It is advisable to submit your claim within 6 months if your company has already been liquidated.
It is better to make a claim before your company is liquidated. People in this situation find that receiving a redundancy payment can help to make the decision to liquidate their company a great deal easier. If you wait until after your company is liquidated, you could miss out on claiming all of your statutory entitlements. So, in short, get it done beforehand!
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The most you can receive for redundancy and other statutory entitlements is:
▪️ Redundancy pay – £16.140 capped at 20 weeks
▪️ Notice pay – £6,456 capped at 12 weeks
▪️ Unpaid holidays – £3,228 capped at 6 weeks
▪️ Unpaid wages – £4,304 capped at 8 weeks
▪️ Payments are limited to £544.00 per week
A director should receive payments within 4-6 weeks, after the creditors’ meeting, so long as you have filled in and returned the relevant paperwork.
You should be making a claim within 6 months of the company entering liquidation and ceasing trading. Some circumstances could lead to that time frame extending to 12 months but the process, in this case, is a little bit trickier.
There are a number of reasons why a claim may not work. Popular ones are that the company has been incorporated for less than two years, you leave the company before it has gone through the liquidation process, or your employment has been transferred using TUPE regulation.
What you are eligible for with redundancy comes down to several factors:
▪️ How long you have been in the role
▪️ Your age at the time you have stopped trading
▪️ Your current salary
With redundancy, salary is capped at £544 per-week.
£16,140 is the overall maximum pay amount of redundancy pay that you can get. This remains constant, even if your actual earnings are higher or your length of service is longer than is required.
According to age, this is what you should be entitled to receive:
Under 22 – Half a week’s pay for each year of service
22 to 40 – A week’s pay for each year of service
Over 40 – A week and a half’s pay for each year of service
Your employee has to give you a minimum of one weeks’ notice for every year you have worked with them when you are made redundant. This goes up to a maximum of 12 weeks’ notice, worth £6,456.
Unpaid wages – Up to 8 weeks
Unpaid holidays – Up to 6 weeks holiday pay
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