Directors Personal Guarantee and impending BR

Tabitha_T

Good Morning

Our limited company recently applied for strike-off to which HMRC have objected. We have invited them to liquidate the company but no response to date. A further complication has now arisen with a major High Street bank, hence the reason for our posting.

Our limited company had a business overdraft of £5000 which we could not repay. The company (nor ourselves) have any assets of any kind. We have been in correspondence with the bank who basically don't want to communicate. They have now assigned a dca and have sent us a copy of a Personal Directors Guarantee which we signed back in 10/07 and related to a previous £10,000 overdraft facility which was repaid in full one month later in 11/07.

The existing £5K overdraft is a more recent facility that the bank gave us in January this year. We have explained the limited company situation to the dca but they are now pursuing us personally in light of the personal guarantee that they have produced from 2007.

So, our question is:

Can the personal guarantee enforce a subsequent overdraft if the original one mentioned in the paperwork was repaid?

A further consideration is that we are due to go personally BR, although not until the beginning of January. In the event that we are deemed personally liable for the £5K business overdraft, should we write to the dca and inform them of our impending BR?

Any advice gratefully received, thank you.

skylight

You need to go through that wording of the agreement carefully.

These agreements tend to be against the entire account and not a particular instance of overdraft, so yes; they can still chase you personally.

The debt will be included in your personal BR, so by all means write and tell them about it. It may not make them lay off though; experience here shows they actually increase the harrassment as all they want is payment. And as you are going BR, its not worth the "fight" on the overdraft anyway UNLESS it's removal would mean you wouldn't face a personal BR (in which case, as I said, check the wording and see a solicitor for a free half hour if necessary).

Tabitha_T

Thanks for your advice. I've just gone through the wording carefully and found a section concerning 'Continuing Guarantee' which says "...this guarantee shall continue as security even if the customer's liabilities reduce to nil or fluctuate".

However, I did read somewhere on the forum a while ago that if the bank did not advise you on these guarantees at the time, that they
could be deemed null and void. At the time we did not receive any advice from the bank, a mailing arrived, asking for the form to be signed and returned, which we did, no questions asked - being desperate for the funds to sink into our company at the time was the more pressing matter.

We do already have a fairly hefty chunk of other personal debt that presumably this would be added to in terms of personal BR.

Not sure what to say to the dca involved, whether to give information regarding date of proposed BR or be suitably ambiguous as to its imminent approach?

At the moment, we are making £1 token payments to creditors, so, possibly we could review the forecast and find another £1 per month to offer to the dca. Not sure if that would be a better option to get them off our back in the short term or simply tell them about the BR...

skylight

Short term, you are better off changing your phone numbers and ignoring them all if BR is your intention.
What can they all do? Nothing. By the time Christmas is out of the way even if they did sent court forms for a CCJ/Charge against the home etc, then that would take you into January and BR time anyway. £1 token payment doesn't make them go away either as its simply not the amount they want!


I assume you have taken professional advice? A BR court judge "could" refuse you BR if you cannot answer yes to his question of having taken advice. National Debtline is a good one as you have business debts included.

Tabitha_T

Thanks, yes, we've spoken to both Business Debtline and National Debtline in relation to our problems. We have been trying to stave off the BR as we have no funds available to pay for the process until early Jan.

We don't own any property and have been on benefits since the collapse of our company earlier this year. The whole dca thing worries us, we have a young child at home and aged parents visiting quite often, we really don't want that knock at the door even though they have no right to be there uninvited.

Will have to go with the stalling process I think...

now

Our company went through last year for a very little amount of money, we had stood as PG fro the company and because of this we were forced to go BR, the bank called in the PG and the finance company did the same with the van's. All of these including HMRC were included in the BR. Have you started to wind the company up? If so how are you doing that? Are you going through a ISP?

Unfortunately when you sign a PG it stands until all monies are paid, what they do with an overdraft is renew it every 12 months but the original agreement remains behind the renewal.

As you plan to go br you need to take advice as we were told the company has to go first as it can't apply for winding up without a director. We had to do the creditors voluntary petition first follwed by BR personally.

Change your phone number as suggested, we had to, if you tell your phone provider that you are getting harassing phone calls they will do it free of charge, just make sure you go ex directory

Tabitha_T

Hi, thanks for posting. We applied for strike-off a few months ago, to which HMRC have recently (and predictably) objected. We have literally no assets so are unable to liquidate the company ourselves. To that end, and following advice we have invited HMRC to do the job for us. However, as we have horrendous personal debt (to which
the PG will no doubt soon be added) we are planning to go personally BR in a couple of months when we will have a spare few hundred quid. We are further advised that it is more than likely that we will end up dealing with the same OR for our personal BR as that for the company liquidation - assuming that is the course of action that HMRC decide to take. Alternatively, they may realise that we have nothing to give them and allow the strike-off to go through after another 6 months or so. Either way we are left with nothing but will have the opportunity to enter a new phase in our lives. No
doubt we will be turning to this wonderful forum an awful lot over the coming months...

now

OK

Tabitha_T wrote: »

Hi, thanks for posting. We applied for strike-off a few months ago, to which HMRC have recently (and predictably) objected. We have literally no assets so are unable to liquidate the company ourselves. To that end, and following advice we have invited HMRC to do the job for us. However, as we have horrendous personal debt (to which
the PG will no doubt soon be added) we are planning to go personally BR in a couple of months when we will have a spare few hundred quid. We are further advised that it is more than likely that we will end up dealing with the same OR for our personal BR as that for the company liquidation - assuming that is the course of action that HMRC decide to take. Alternatively, they may realise that we have nothing to give them and allow the strike-off to go through after another 6 months or so. Either way we are left with nothing but will have the opportunity to enter a new phase in our lives. No
doubt we will be turning to this wonderful forum an awful lot over the coming months...

OK you need to ralk to somebody quickly, firstly you can't strike the company of the register if it owes money to creditors ( I think if I remember anything above a certain amount) also I think you can;t go BR abd leave the company with out a director (BR not allowed to be a director of a LTD company without permission from the court) The state picks up the costs on a company going through with no means to settle a IP, this is what happened in our case. Most IP will give you free advice for the first hour, so please go and seek some help

now

now wrote: »

OK

OK you need to ralk to somebody quickly, firstly you can't strike the company of the register if it owes money to creditors ( I think if I remember anything above a certain amount) also I think you can;t go BR abd leave the company with out a director (BR not allowed to be a director of a LTD company without permission from the court) The state picks up the costs on a company going through with no means to settle a IP, this is what happened in our case. Most IP will give you free advice for the first hour, so please go and seek some help

Also HMRC will mot be to keen to push the button as it caosts them money

JCS1

Tabitha_T wrote: »

Hi, thanks for posting. We applied for strike-off a few months ago, to which HMRC have recently (and predictably) objected. We have literally no assets so are unable to liquidate the company ourselves. To that end, and following advice we have invited HMRC to do the job for us. However, as we have horrendous personal debt (to which
the PG will no doubt soon be added) we are planning to go personally BR in a couple of months when we will have a spare few hundred quid. We are further advised that it is more than likely that we will end up dealing with the same OR for our personal BR as that for the company liquidation - assuming that is the course of action that HMRC decide to take. Alternatively, they may realise that we have nothing to give them and allow the strike-off to go through after another 6 months or so. Either way we are left with nothing but will have the opportunity to enter a new phase in our lives. No
doubt we will be turning to this wonderful forum an awful lot over the coming months...

If HMRC does deal with the company and then you go bankrupt, it will be the same OR office. When you speak to them about the BR, make them aware of the connection to the company and they will probably assign you the same examiner and case clerk to make things simpler.

Tabitha_T

Thanks for your input ('now', I've sent you a PM). We have spoken to an IP and BDL who advised us of our course of action and have now assured us that things have been done correctly so hopefully we're on the right track. As per JCS1's posting, we too have been advised that the same OR will more than likely take on our personal BR case and the liquidation of the company. (Although with zero assets and not an awful lot of outstanding CT liability, maybe £6-7K max we are further advised that HMRC may well permit strike-off to eventually go through and not even go with liquidation...). Due to the PG in place at the bank, the business overdraft debt will become included with the personal BR. Think that covers what has been gone through to date. Have had problems on the forum tonight, very slow, site kept crashing...hope ok now