Company credit card from company that has ceased trading

GetOutOfThisMess

Hi,

Until 17th July of this year, I had been working through my own limited company for the past 10 years but due to lack of business due to the recession etc. I had to cease trading as the company could not pay it's corporation tax bill.

I wrote to HMRC etc. informing them of this and have just written to companies house asking for the company to be struck off etc.

The problem I have at the moment lies with an MBNA Business Credit card that I used for making purchases etc. on behalf of the company. I have informed them that the company has ceased trading but they are still contacting me telling me that I owe them money. The card is registered to "my name" of "my old company name".

The HMRC and the bank (small business overdraft) seem to have aknnowledged that as the company was a limited company and therefore the company, not me personally is responsible but MBNA keep chasing me personally for the payment.

Any advice on what I should do to deal with MBNA would be welcomed.

Thanks.

TFD_2

GetOutOfThisMess wrote: »

Hi,

Until 17th July of this year, I had been working through my own limited company for the past 10 years but due to lack of business due to the recession etc. I had to cease trading as the company could not pay it's corporation tax bill.

I wrote to HMRC etc. informing them of this and have just written to companies house asking for the company to be struck off etc.

The problem I have at the moment lies with an MBNA Business Credit card that I used for making purchases etc. on behalf of the company. I have informed them that the company has ceased trading but they are still contacting me telling me that I owe them money. The card is registered to "my name" of "my old company name".

The HMRC and the bank (small business overdraft) seem to have aknnowledged that as the company was a limited company and therefore the company, not me personally is responsible but MBNA keep chasing me personally for the payment.

Any advice on what I should do to deal with MBNA would be welcomed.

Thanks.

I'm pretty sure that MBNA, along with many companies offering company credit cards hold you personally liable for the debt. Check the T&C's.

It's a bit different with a proper bank - I have a company NatWest charge card - the company is liable for the debt, not the directors (although we have signed a personal guarantee so are liable through that...).

MBNA, Capital One and others will put the company name on the card, but target these cards as a way for you to distinguish personal and company debt.

On some cards, the company and the individual are jointly liable - on some only the indvidual is liable...

GetOutOfThisMess

Thanks for the reply.

When I applied for the card, I didn't fill in any personal information such as my income etc., I had to fill in company related details such as company income etc. so I am hoping that it's company related.

One clue I had from them when speaking to them earlier was that the person on the phone said that the company had to show up on Companies House as closed down before they'd leave me alone. If that's the case then it must be a company debt surely?

TFD_2

GetOutOfThisMess wrote: »

Thanks for the reply.

When I applied for the card, I didn't fill in any personal information such as my income etc., I had to fill in company related details such as company income etc. so I am hoping that it's company related.

One clue I had from them when speaking to them earlier was that the person on the phone said that the company had to show up on Companies House as closed down before they'd leave me alone. If that's the case then it must be a company debt surely?

Check those T&C's...

If you look here:
https://wwwa.applyonlinenow.com/UKBCapp/Ctl/display?page=terms

This text here doesn't look what you want to see (assuming same as T&C's when you signed up)

I (the principal contact) confirm that I am authorised by all of the members of the partnership which is named in the application to make the following statements.

• The partners authorise MBNA to accept instructions from me from time to time relating to the account (including for the granting of credit facilities and the issue of MBNA Business Credit Cards) unless and until MBNA receives proper notification to the contrary from or on behalf of all of the partners.
• All of the partners agree that their liability to MBNA will be both joint and several so that each partner is liable to MBNA for the indebtedness on the account.
• The partners agree that this mandate will continue in force, and MBNA may continue to treat the surviving or continuing partners as having full power to carry on the partnership business, notwithstanding any change in the partners or the constitution of the partnership, until MBNA receives written notice to the contrary signed by or on behalf of all the partners.

I confirm that I have the authority of all of the partners of the partnership to enter into this agreement on their behalf, which I now do, and that MBNA need not give each partner a separate statement. I, on behalf of myself and my partners, agree to be bound by the MBNA Business Credit Card terms and conditions and confirm that we will be responsible for paying any balance due on the MBNA Business Credit Card account.

NickX

TFD, surely that applies to a Partnership whereas the OP had a Limited Company ?

My understanding is that in the case of a Limited Company the debt lies with the Company and not an individual unless that individual has expressly agreed to underwite the debt personally.

OP, I would check your Terms and Conditions closely to see if there is any personal liability. If not, they haven't got a case, but they may not accept that without evidence that the Limited Company has ceased trading.

never-in-doubt

NickX wrote: »

TFD, surely that applies to a Partnership whereas the OP had a Limited Company ?

My understanding is that in the case of a Limited Company the debt lies with the Company and not an individual unless that individual has expressly agreed to underwite the debt personally.

OP, I would check your Terms and Conditions closely to see if there is any personal liability. If not, they haven't got a case, but they may not accept that without evidence that the Limited Company has ceased trading.

Thats what my understanding was, i.e. limited liability.... (ltd company)

Normally any insolvency practitioner (if the company went bust) would allocate such debts towards the overall creditors meeting?

To be fair, if the credit card was issued to a director of a ltd company then the company folded (not simply ceased trading but actually went bust) then the debt that was assigned to the card would be written off within the company firesale or stripdown of assets.

pelirocco

You cannot cease trading while owing money , you will need to put the company into liquidation. You should check the T&C's of the card , in case you have signed a personal gaurentee

never-in-doubt

pelirocco wrote: »

You cannot cease trading while owing money , you will need to put the company into liquidation. You should check the T7C's of the card , in case you have signed a personal gaurentee

I know thus I stated not simply ceased trading but went bust in my post! i.e. a company can cease trading if the director used a credit card and assumed all liability to that card himself.

NickX

Well there is also Corporation Tax owing, so there is going to have to be some sort of winding down process !

Does the Limited Company own any assets ? E.g. Cars, Computers, Office Equipment etc ?

If so, these could be sold and the proceeds go towards the debts. Unfortunately for MBNA the HMRC will take their chunk before the Credit Card debt gets paid (my heart bleeds :rotfl:)

never-in-doubt

NickX wrote: »

Well there is also Corporation Tax owing, so there is going to have to be some sort of winding down process !

Does the Limited Company own any assets ? E.g. Cars, Computers, Office Equipment etc ?

If so, these could be sold and the proceeds go towards the debts. Unfortunately for MBNA the HMRC will take their chunk before the Credit Card debt gets paid (my heart bleeds :rotfl:)

Ahh nicely spotted matey :beer: - thus the answer is plain and clear - the debt to MBNA should be added to the overall debts within the liquidation.

If the OP signed a personal guarantor against the card debt, then not much they can do other than try and reach some agreement however always the risk of adverse credit data being registered....

TFD_2

never-in-doubt wrote: »

Ahh nicely spotted matey :beer: - thus the answer is plain and clear - the debt to MBNA should be added to the overall debts within the liquidation.

If the OP signed a personal guarantor against the card debt, then not much they can do other than try and reach some agreement however always the risk of adverse credit data being registered....

Most company credit cards hold the card holder liable along with the company. This may or may not be the case, hence telling him to check the T&C's.

I'm fully aware that a Limited company means Limited liability, but not if the agreement specifically holds the Director / card holder personally liable.

If he's not personally liable, then he tells them to contact the liquidators. If he is personally liable, then he needs to work something out.