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Dan White: You've shown your hand to bank...maybe it's time to quit the travel business

Dan White answer your financial questions.

I run my own travel business and, like all retailers, things are tight for me at the moment. I advised the Permanent TSB that I might need to go on interest-only on my mortgage (€99,000) so that the extra funds could be channelled into the business. I also mentioned that I might have the opportunity to refinance and, if so, I would be able to pay off the mortgage.

In this instance I wrote to them and asked if they would consider a percentage reduction on the capital sum. Their reply was that they don't do "debt forgiveness". I find this terminology insulting to say the least in view of what has gone on in the financial sector over the past number of years.

I appreciate that Permanent TSB might not have been in the mire as much as the others, but their reputation has been severely tarnished at the same time. I would appreciate any advice on whether I should go back at them and, if so, what "ammunition" I could use.

Jim

Somehow I can't help feeling that Jim shot himself in the foot by mentioning the possibility of refinancing his mortgage to Permanent TSB.

No bank on Earth, no matter how bad conditions are, is going to consider writing off a proportion of a loan if there is even a slight chance that the borrower will be able to refinance the debt with another lender and repay the amount owed to the bank in full. Jim has already shown his hand to the Permo.

There are unfortunately also a number of other potential weaknesses in Jim's argument that his loan should be written down -- "debt forgiveness" in banker-speak. At "only" €99,000, his mortgage is relatively small by the bloated standards of the Celtic Tiger era. This means that, even after the recent property price collapse, his mortgage probably represents only a small percentage of the value of his house.

Once again, no bank will write down a mortgage where the loan-to-value ratio is, as I suspect it is, relatively low.

But, even if the bank were prepared to play ball, there is an even more fundamental reason why Jim should be slow to seek a write-down of his mortgage. Even if he got a write-down he would be inextricably linking his personal financial affairs, ie. his house, with those of the business. Not a very good idea, not a good idea at all.

When considering the prospects of his business, Jim needs to be utterly ruthless. What are its chances of survival even if he can cut a deal with his bank? In recent years an ever-increasing proportion of travel-related business has migrated online. Who now buys an airline ticket from a retail travel agent?

While travel agents have retained some specialised business, consumers are doing more and more of their purchasing online. Jim mustn't let his heart rule his head on this issue.

Unless he is 100pc sure that his business will still be around in five years' time then he should cut his losses now.

I am a member of the Total Fitness gym in Sandyford. I recently renewed my annual subscription at a cost of €375. Now I have read that the gym has gone into liquidation and when I went to the gym last week, I found that it was locked. What are the chances of getting my money back?

Sheila

Total Fitness, which had gyms in Sandyford, Malahide and Castleknock, went into liquidation last week.

Unlike some previous cases of gym groups in financial difficulties, such as the Jackie Skelly Group, to which an examiner was appointed in January 2010, the outlook for the Total Fitness members is very bleak indeed.

While Jackie Skelly, which has since been sold to UK fitness group Energie, continued to trade throughout the examinership, leaving existing members unaffected, Total Fitness has closed its doors.

This unfortunately means that its existing members are very unlikely to see any of their money again.