GDP mediation results in £680,449 of a Negative Equity Debt Write-down

Case Matter:    
In September 2019, a lady had an initial consultation meeting with us regarding a liability in joint names with her ex-husband owed to a Private Equity firm from security that was placed on development land in 2007. As a result of the property crash in 2008, the value of this development land plummeted to well below the sum that was secured on this land. Subsequently, the lender repossessed this land and our clients incurred a shortfall liability totalling £700,749. As a result, over the subsequent years, our clients were regularly contacted and put under immense pressure by the lender regarding repayment of this liability. This had an immense and serious adverse effect on both their physical and mental health. This was compounded further by the fact that our clients were aged in both their 60’s and 70’s.

Solution:
Our first aim during our initial consultation meeting is to give reassurances that solutions are always available to settle a debt issue. These clients were understandably very distraught as this matter had been ongoing for many years. However, after our initial consultation meeting, they were immediately put at ease when they became aware that a solution was available to bring their nightmare to an end.

During our meetings over the following months, we worked with the clients and devised a workable strategy. Once agreed, we started to put the wheels in place to transport our strategy into a solution. As there was no disposable income available, our overall strategy was to offer the Private Equity Firm a lump-sum settlement in order to finally resolve this matter and to prevent our clients from being made bankrupt which would have had serious repercussions for them going forward as they both owned homes. The funds were being provided from third-party family members of the clients. 

Over the next few months, we worked closely with the clients to ensure all required information and documentation was provided to the Private Equity Firm. In November 2020, we then offered a lump-sum settlement to them. After just over a month of negotiations, the Private Equity Firm agreed to a full and final settlement of £22,300. Our clients were delighted with the outcome which was a fantastic result for GDP, but more importantly for the clients.

Case Study Summary:
Creditor: Private Equity Firm owed £700,749
Proposed Solution: Full and final settlement proposal
GDP Mediated Settlement: Creditor accepted £22,300 (equating to 3.1p in the £)
Settled: December 2020