Ending the marriage- the process to decree absolute
Financial issues in divorce- ancillary relief
Divorce and Pensions
Divorce advice for men
Divorce for non residents
DIY divorces
Timescale - quick divorce or not
Wills & divorce
Legal Aid











Prenuptial Agreements
Judicial Separation
Changing surnames
Civil partnerships


Legal Stuff
This is a UK based forum about divorce and related issues. Feel free to contribute. Your experiences or opinions may help others. The links on the left lead to basic information about most common divorce questions. The information opens in a separate window. You can use the search function to search the forum.
User: Log In Create A New Profile
Actions: New Topic Print View RSS
History: Home UK Divorce Forum
Company loans and soft loans (7 Posts)
Started By:
30 January, 2018 11:02AM
Company loans and soft loans
beenans - 30 January, 2018 11:02AM
I own a minority shareholding in a family business in the North East and am a Company Director have a loan from the company of around £30k. All these payments are recorded and will be in the end of year accounts.

I need to pay the £20k legal fees I have incurred

If I get another £20k loan from the business to pay my legal fees will the court view this as a soft or a hard loan

The other side claims it is a soft loan (as i part-own the company) and I claim it is a hard loan and the legal advice I have so far is that it is difficult to predict what the court will say which isnt very helpful
Re: Company loans and soft loans
davidterry - 30 January, 2018 12:23PM
If you can get the borrowing from the company easily enough then I assume in due course you will also be able to persuade the company to write it off and/or repay it on favourable terms. If that is the case it is a soft loan.
Re: Company loans and soft loans
beenans - 30 January, 2018 04:49PM
Thanks for the response. As my only assests are my shares and the equity in the house, she is likely to get the equity in the house and I keep my shares. As I cannot finance my legal fees any other way will the loans i take out for legal fees also then be considered soft loans?

The issue will be I will have shares I cannot sell (I only have 15%) and then will have £50k debts the court considers soft loans, though I will have to pay them back.

So will the court assume I have no debt (even though i am £50k in debt) and therefore my wife is left with all the equity and I am left with a hugh debt that i not recognised?

She is also going to be applying for costs which i know is unlikely to succeed but if the court considers me to be debt free then this might very well happen
Re: Company loans and soft loans
davidterry - 30 January, 2018 05:56PM
Since you do not give any figures or any basic information such as the length of the marriage, whether there are dependent children etc no-one can speculate on the answers to the questions you ask.
Re: Company loans and soft loans
Willapp - 31 January, 2018 09:04AM
Just as a suggestion, could you not get an unsecured loan from a normal high-street provider for the £20k instead of borrowing it from the company? Surely that way it would be considered a 'hard loan' and a provable debt? Providing you have a reasonable credit rating I would think such a loan not difficult to obtain?
Re: Company loans and soft loans
HatMan - 31 January, 2018 10:47AM
Yeah - but then he would have to pay interest and actually repay the debt.........
Re: Company loans and soft loans
beenans - 31 January, 2018 12:52PM
Hi sorry for the lack of information - marriage was 9 years, 2 children. House equity £300k and shares valued at £300k by court appointed valuer (but a private limited company so I cannot sell them even if i wanted to, this would jsut be the value if they were sold on the open market, which isnt very helpful as they are not sellable)

I am trying to get an unsecured loan of £25k to pay the company debt. Then have around £20k in solicitors fees etc which i will have to fund with another loan from company as cant borrow any more.

Any money i borrow from the company I will have to pay back regardless if the court rules them a soft loan
Goto Topic: Previous Next

Sorry, only registered users may post in this forum.