In the wake of economic upheaval caused by the global pandemic, governments around the world introduced financial relief measures to support struggling businesses.
Whilst in countries such as the United States of America their business support loan scheme known as the Paycheck Protection Program (PPP) has seen those who borrowed money being allowed to apply for and being given forgiveness on the outstanding amount owed.
Here in the UK the Bounce Back Loan (BBL) scheme emerged and at the time was a lifeline for countless enterprises, offering financial aid to weather the storm. Whilst BBLs are being written off, there is no fast and hassle free way to apply for such, unlike in America.
As such, as the dust begins to settle, a new wave of stress and anxiety has taken hold—specifically, the distress stemming from defaulting on these loans and the imagined spectre of debt collectors at the doorstep, or some specialist team of police officers or an imaginary team of Government led investigators ratting at your door.
The Burden of Default
While the BBL scheme, did at the time provide much-needed support to businesses facing financial turmoil, the implications of defaulting on these loans can feel overwhelming.
The cycle of anxiety often begins with the worry of not being able to meet repayment obligations, leading to fears of being pursued by debt collectors.
The fear of the unknown, combined with concerns about financial ruin and reputational damage, can create a constant sense of unease.
The Imagined Knock on the Door
One of the most common sources of anxiety for individuals who have defaulted on BBLs is the imagined knock at the door from debt collectors or others.
The idea of an intrusive visit from collectors demanding repayment amplifies stress levels, contributing to sleepless nights and heightened emotional distress.
The Reality Check
However, despite the widespread fear of a physical visit from BBL debt collectors, there has never been one case of such occurrences.
The rules of the scheme state during the 12-month period which begins from the date of the demand for full repayment letter sent out after defaulting on a BBL, during which lenders have been told 12 months the maximum period of time they can try and set up a repayment plan or recover anything from borrowers that have defaulted on their BBL, no doorstep visits are permitted
Separating Fact from Fear
The fear of debt collectors and the anxiety associated with BBL defaults might stem from a mix of uncertainty and exaggerated perceptions.
It’s important to recognize that whilst BBL loan agreements are not regulated by the Financial Services and Markets Act 2000 or the Consumer Credit Act 1974, the recovery of defaulted BBL’s operates within regulations and ethical guidelines.
Lenders have been told to prioritize negotiation and communication over confrontational tactics, and only for a maximum of 12 months.
The Unseen Action
Contrary to the perceived threat of widespread debt collection visits, action taken against individuals who default on BBLs are only concentrated on those who had engaged in fraudulent or unethical behaviour.
It is those who blagged BBL’s collectively valued at over £100,000 that could be visited by NATIS the dedicated police unit tasked with investigating organised BBL fraud, and in instances of insolvency, bankruptcy, or even company dissolution when there is a BBL involved, then such cases instantly trigger a rigorous investigation into how the BBL was applied for and spent.
Navigating the Anxiety
If you find yourself grappling with the stress and anxiety stemming from defaulting on a Bounce Back Loan, there are steps you can take to alleviate your worries:
- Open Communication: Reach out to your lender or their nominated debt collection if you are in a position to repay anything and discuss with them your situation and explore potential repayment options or forbearance. It is important you let them know of any vulnerabilities you may have and also let them know you cannot afford to repay if you cannot do so.
- Seek Professional Guidance: Consulting a financial advisor or counsellor can provide you with valuable insights and strategies for managing your debt, but also with the stress and anxieties caused by the last few years of lockdown and a downturn in your business and finances.
- Focus on Solutions: Concentrate on taking actionable steps to address your financial concerns rather than dwelling on worst-case scenarios.
- Educate Yourself: Learning about the processes and regulations surrounding BBL defaults can demystify the situation and empower you to make informed decisions. I am always available if you need a chat.
- Practice Self-Care: Engage in stress-reduction techniques such as mindfulness, exercise, and hobbies to manage anxiety and promote emotional well-being. That may sound weird when you are sat there worrying but believe me just getting out of the house and even doing something as simple as going for a drive or a walk can make a difference.
A Light in the Tunnel
The anxiety and stress stemming from defaulting on Bounce Back Loans are real and valid emotions.
However, understanding the reality of the unique defaulter friendly debt collection processes and focusing on proactive solutions can help alleviate these worries.
Remember that you’re not alone in facing these challenges, and seeking support from financial professionals and much more so emotional networks can guide you toward a brighter financial future.
In the end, the knock that never comes may become a symbol of resilience and the ability to overcome fear with knowledge and action.
If you need a chat feel free to give me a bell, all in complete confidence on 07437 618228.
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Never, ever forget, it was the Government who told you to close/suspend your business, then filled your heads with stories of how going outside could lead to your death due to the “pandemic” then as you sat there with your business devastated, and in most cases, in a very, very vulnerable state, dangled a huge £50k loan before your eyes, with no credit checks and no affordability checks.