Case Study:
Debt Restructuring-IndividualClient was a Medium Net Worth individual who had incurred matching debt to fund an investment of €250,000 in a wealth fund, which had reduced to approx. 30% of original value .The client had sufficient liquid assets to meet his obligations in full, and had serviced all interest payments .The debt had just been sold (July 2018) to a third party, and the client hoped for some debt reduction.
Wise Owl recommended that the interest payments be stopped immediately- citing financial hardship and an opening letter was sent to the lender. The financial year of the lender ended on 31 Dec and Wise Owl took a view that a quick settlement of the entire debt before that date would be very attractive to them.
Due diligence revealed that some of the lenders paperwork could be challenged and investigation of the Wealth Fund revealed that the assets were being sold with a final payout of €79,500 projected for spring 2019.
An opening offer of €150,000 in full and final settlement of the debt was rejected with the lender indicating that it would not settle for less than €200,000. Wise Owl then made a further offer of €170,000 with settlement to be before Christmas 2018.Agreement was reached for €175,000 which was duly paid.
The client received a final payout of €83,200 from the Wealth Fund in May 2019; leaving him with a net capital loss of €91,800.This loss can be set off against future capital gains.
The client was satisfied with the outcome.