Help needed with Personal Guarantee validity

grandadevans

Hi Everybody,


I need serious help with a Personal Guarantee. First of all let me say that I've been in touch with a solictor who wanted £195 p.h + vat & £500 on account. Considering the court case is only over £2k that's a no no for me.


I used to own and run a Limited Company which ceased trading around 2 years ago (not sure as to the legal position of the company at the moment). For one of the services I acquired both my wife and I gave personal guarantees. I did have some correspondence over a year ago with someone who said

The above named Company

(and the letter referenced the name of my company) is indebted to my company to the amount of £xxx.

The other day we both received claim forms for small claims court quoting the provided personal guarantees as the reason.

I have since found the copies of the PGs that we had to send back to them and I can see when I believe is a glaring mistake.
On both of the PGs we are named as respective guarantors and yet at the bottom of the same page(s) we are both named as "The Guaranteed Party". ie on mine it names John Evans of my address as the guarantor and then at the bottom names John Evans at my address as the guaranteed party. On my wife's version she has her name in both places also.

Nowhere in the 15 page document does it mention my [old] company name or registration number and it is clear from the document that "The Guaranteed Party" is meant to be (in my case) my company.

Whilst I do not wish to 'do' anyone out of money they are owed and I do realise my moral obligations it is the best my wife and I can do to feed our family at the moment.
Would I be able to cite the fact that the PGs are invalid as the debt (as acknowledged by the person/company seeking payment) is the Limited company itself and neither of us. We cannot guarantee ourselves (or can we)?

I may be missing something but the documents are worded very technically but as mentioned above the only mentions made are of my wife and I. I cannot see anything in there about guarantees for actions taken out on behalf of owned companies etc.

Any help is appreciated.
John

patman99

Then the question you need to google the answer to is -
Can someone be a personal guarantor to themselves ?.

Can I assume that the company chasing you, is a loan company ?. If so. then you may well have taken-out the loan in the name of your former company with you giving your personal guarantee. In which case, you will be liable for the outstanding balance, as will your spouse.

Annisele

Ignoring the personal guarantees for a moment, I think you badly need to find out the current status of your limited company. Go look it up on WebCheck at Companies House. If it hasn't been dissolved or had new directors appointed, you may well have continuing obligations.

As to the personal guarantees, I don't think you're going to get a definite answer from forums. Courts will look at all of the circumstances and all of the papers, so even if there is a deficiency in one place that won't necessarily prevent the lender from enforcing the guarantee. However, I think the liklihood is that, unless the lender has made a whole series of horrendous blunders, that you are liable for the debt.

You could try giving Business Debtline a call; they might be able to give you some initial thoughts as to how you could respond to the claim form.

grandadevans

Thank you very much for all of the feedback.

You know guys? Thinking about it I would have to agree with you. To take a Devil's advocate view:
The written contract doesn't have to be there: it is just a confirmation of the "consideration" needed to make a contract. I obviously knew what I was signing and a mere technicality does not alter the intentions.

I did email several more solicitors yesterday. I think I will start preparing an up to date personal financial statement and get ready to make an offer and hopefully we can go through the mediation service and try and keep ourselves from getting a CCJ as this is the last thing that we want.

Thanks again for all of your replies.

The good news is that the company has been dissolved (thanks Annisele) so I can now get in touch with everybody, let them know and try and get confirmation from everybody that there is nothing outstanding and nothing left to come back and bite is in the bottom.

John