Can You Get Out Of Personal Guarantees?

Required

I set up a small business 2 years and gave a couple of personal guarantees in order to get the bsuiness upand running. Unfortunately due to the current environment people have stopped buying the advertising from my business.

The business has therefore run out of cash with the bank withdrawing the business overdraft. I am therefore liable to pay the business debts of £15,000 under a personal guarantee, which I can not do.

Due to the business going under and and trying to keep it a float personally my credit rating is through the floor.

Is there any way out of the personal guarantees?

jonesMUFCforever

Are the guarantees secured at all?
If not then the bank's security is as good as a chocolate teapot.
Did they flog any insurance to you which if you close down the business, you could claim from?

iolanthe07

I don't think you can renege on personal guarantees, otherwise what would be the point of them? You need to take professional advice though - what does your accountant advise?

Julu

I'm in similar situation - but for a lot more money! (PG £100,000, added interest +£30,000)!!!

Business went bust in 2004 - leaving me over £1m in debt!


If anyone has any solutions would be really keen to hear?

jonesMUFCforever

Julu wrote: »

I'm in similar situation - but for a lot more money! (PG £100,000, added interest +£30,000)!!!

Business went bust in 2004 - leaving me over £1m in debt!


If anyone has any solutions would be really keen to hear?

I'll ask you what I asked the original OP ( who didn't bother to respond) was the guarantee secured - if so what against.
If not then it is just a piece of paper.
Considered bankruptcy?

Julu

Guarantee not secured. Prefer to avoid bankruptcy if at all poss - have managed to pay majority of creditors (hence financial situation),just 2 unsecured 'PG' debts left - one a car leasing company, the other a bank who provided overdraft to business. This is the one I am struggling with...solicitors involved, but nothing too heavy as yet - took them 2 years to provide copy of PG.

Any assistance gratefully received

jonesMUFCforever

Then you are in a good position - ask them what they would prefer?
You declaring bankruptcy - they getting nothing or they working with you and they get something back without them resorting to expensive legal litigation.
Whilst you are at it ask them how stupid they must be feeling taking a personal guarantee from you without backing it up with security!

Julu

Thanks Jones MUFC...

Will post back after meeting next month

Required

Apologies to jonesMUFCforever and iolanthe07 this is my first visit back to the forum since my original post. Yes I have now bookmarked the site.

The guarantees are not secured against anything. However once they have defaulted and I become liable for full payment will they not just pass the debt onto a collection agency and before long I will have bailliffs knocking at the door demanding money?

jonesMUFCforever

Required wrote: »

Apologies to jonesMUFCforever and iolanthe07 this is my first visit back to the forum since my original post. Yes I have now bookmarked the site.

The guarantees are not secured against anything. However once they have defaulted and I become liable for full payment will they not just pass the debt onto a collection agency and before long I will have bailliffs knocking at the door demanding money?

Yes but they can't do anything without a court order.
At least they can't take your house off you!
My advice is simple - arrange a repayment plan - pay what you can afford - you will get hassled by their collections department but their bark is worse than their bite unless they take you to court.
I work for a bank and again I can't understand how stupid (or lax) bankers have become taking a guarantee without anything to back it up.

santana777

Hi,
I was the director of a company for literally 3 months before i knew of its true financialy desasters that awaited me. Long story short i put the company in to liquidation,
Worst outcome a personanl garantee, which i wasnt aware of.
The solicitors chasing the debt are not nice to say the least, am very young early twenties, so the letters and the pressure got to me, so i took things in to my own hands.

Its taken me well over a year, am out fo work, but i fought the case in court, its now got to the point, where the solicitors chasing the debt, went to court, my defence was thrown out, the solicitors wrote once demanding payment in full, then went straight to high court, (which apprantly they can do) and got high court to issue a warrant for possessions of my goods, and sent me high court baliffs.

Once it gets that far, there is little hope, i was desperate for help, debt line was crap as it was a business debt so they couldnt help, advice beaure waere just as bad, any how i took advice from court, they told me simply you persue it any further you will incure alot more costs you should just pay up..

So being very upset and crying, i thought to myself if i go bankrupt they get nothing, i own nothing anyways, on benefits, i thought give it a shot, worse case senario bankruptcy at leats i can say i tried.

I took the solicitor company to court, got all high court orders stopped ont he grounds the case should have been heardin my local court rather then one 200 miles away. Congratulations to me, first relief. Then came the negotiating part in court, but the case was about paying, but the judge gave me a helpful tip when i said basicall this garantee says, spend as much as u liek as long as you personally pay it back, Judge that has to be financial neglect, GUESS WHAT!!???? the judge agreed and said it should not be allowed and young lady you have grounds, but todays hearing is about payment not your case against them.
any how i arrived late and my last hearing was dismissed, in all i will pay the first time £75 to have the hearing again where i am paying a couple of pounds due to my financialy circumstances per months my debt was 5 gran its gone to 7500 now with interest but that can be frozen by call of judge on the day we agree the payment....

My advise fight it, you can will i have done it all on my OWN, all i need now is a smart solicitor to fight the personal grantee for me on the grounds of the initials companies financial neglect, as the garantee was secured against nothing, i have no home, mortgagte or anything and the fact they gave a open limit and thats neglect....so any one out there a good solicitor that wants to help me get in touch, thank you all