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  • FIRST POST
    • mr_b
    • By mr_b 6th Oct 17, 2:27 AM
    • 10Posts
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    mr_b
    Advice Needed. Personal Guarantee being enforced
    • #1
    • 6th Oct 17, 2:27 AM
    Advice Needed. Personal Guarantee being enforced 6th Oct 17 at 2:27 AM
    Not sure if this is the right section for this post so please move or advise if it would be better placed.

    The story goes I was the director of a business that started really well but from our main corporate client always leaving payments very late after due date meant we had to start using a £5000 overdraft just to ensure we were covered at these times. The overdraft needed a personal guarantee to secure.

    Everything was great for first year and it really helped but over time our main partner started falling short every month and left us using it continuously because of the extra costs running round collecting the money and the necessity to move people into collecting effected other income generation. This is part of what actually caused me a full mental breakdown I'm still recovering from but more on that later. The company then became reliant on it to operate although generating substantial income towards the end of the second year of its use.

    This is the part i'm concerned about. Roughly just over a week before its renewal date came a letter saying we need to request/reapply for renewal for the overdraft. I called and was not happy as I felt it was a bit late and spoke to a very friendly and helpful guy who after speaking to me said he'd looked at it and put my application in to go through, said it wouldn't be a problem as everything looked great in the account and that I wouldn't have had to worry and it would have just auto renewed anyway. I was grateful and relieved and went on my way.

    A couple of weeks after the overdraft was due to renew and had been using it the business got a letter stating that they were not going to renew the overdraft and it would cease straight away. This meant the business could not continue to operate as it had no notice to deal with this. The other partners got wind of this and saw this as a great excuse to vanish and not pay their bills and the company ended up dissolved with the £5000 still to pay meaning the personal guarantee has fallen on me which really brought back the struggles with all the mental issues I was starting to overcome from my breakdown.

    I am struggling with this as the businesses literally cost me everything, so I literally have nothing at the moment and did get a job but they shut after 3 months and didn't pay and vanished without a trace. I lost all my savings, no income atm and assets.

    I need help and advice regarding the best course for this situation. My questions I have at the moment are after the bank telling me they were going to issue the overdraft, the fact they didn't notify me til just over a week before and only denying the renewal weeks after it was due to be renewed and had still been in use (so we presumed was granted) does this give me any leg to stand on to helping me deal with it? In my opinion all these points equate to the bank acting improperly and gave no chance to deal with the situation, could this be grounds to dispute the personal guarantee as they almost forced this position, misrepresented themselves. I have also read about the bank breaching their duty of good faith as they advised the overdraft would be in place and we continued to use it after the renewal date and doing a quick search I have read in relation to this duty of good faith "if your bank is the main instigator of the collapse of the company or person that borrowed the money, then by acting in an unfair manner, the personal guarantee may be held to be unenforceable by a court."

    I tend to have a good grasp of things usually but the problems I have gone through are weighing on me unfortunately and I cannot get my head around many of these things unfortunately so would be over the moon if someone could give me some advice as the best way to deal with this is. I do feel that this was forced unfairly by the lazy actions of the bank. I do feel that this is something that the FCA would frown highly on. Thank you in advance for any help
Page 1
    • chevalier
    • By chevalier 6th Oct 17, 6:27 AM
    • 7,742 Posts
    • 17,992 Thanks
    chevalier
    • #2
    • 6th Oct 17, 6:27 AM
    • #2
    • 6th Oct 17, 6:27 AM
    didn't want to read and run, and i am sorry i can't help. But it is early yet i am sure someone will be along soon
    chev
    I want a job that is less than an hour driving away from my house! Are you listening universe?
    • fatbelly
    • By fatbelly 6th Oct 17, 6:51 AM
    • 11,360 Posts
    • 8,523 Thanks
    fatbelly
    • #3
    • 6th Oct 17, 6:51 AM
    • #3
    • 6th Oct 17, 6:51 AM
    In my opinion all these points equate to the bank acting improperly and gave no chance to deal with the situation, could this be grounds to dispute the personal guarantee as they almost forced this position, misrepresented themselves. I have also read about the bank breaching their duty of good faith as they advised the overdraft would be in place and we continued to use it after the renewal date and doing a quick search I have read in relation to this duty of good faith "if your bank is the main instigator of the collapse of the company or person that borrowed the money, then by acting in an unfair manner, the personal guarantee may be held to be unenforceable by a court."
    Originally posted by mr_b
    A 5k non-priority debt is not the end of the world and if you have to deal with it there are half a dozen ways to do so, and we would help you find the best way for you.

    However if they can be persuaded to drop it, so much the better. So start by setting the above out in writing to your bank, ask them to not pursue the 5k and see what comes back. The stage after that would be to refer it to FOS and FCA.

    Try to avoid mentioning court too much at this stage, except to say that the 'overriding objective' is to avoid the need for court action on this small debt.
    • mr_b
    • By mr_b 6th Oct 17, 12:33 PM
    • 10 Posts
    • 0 Thanks
    mr_b
    • #4
    • 6th Oct 17, 12:33 PM
    • #4
    • 6th Oct 17, 12:33 PM
    A 5k non-priority debt is not the end of the world and if you have to deal with it there are half a dozen ways to do so, and we would help you find the best way for you.

    However if they can be persuaded to drop it, so much the better. So start by setting the above out in writing to your bank, ask them to not pursue the 5k and see what comes back. The stage after that would be to refer it to FOS and FCA.

    Try to avoid mentioning court too much at this stage, except to say that the 'overriding objective' is to avoid the need for court action on this small debt.
    Originally posted by fatbelly
    Thank you that is really helpful, i will do this. Just wondering if any one has any more guidance as to what these actions by the bank are technically doing wrong and if the fca would hold this against them in any way?
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