debenture - bank account frozen

rivertax

Hi there,

I had an arrangement with a finance company for my business and unbeknown to me included a debenture. This 3rd party has frozen my bank account with notice and without good reason. I have spoken to my bank who seem unable to help and say I should contact the 3rd party. I never signed any debenture and dont know how they can freeze my account. They say we owe them money but we paid and now they want more interest.

Can anyone help me

jonesMUFCforever

You need paid for legal advice.
You also need copies of the agreement - was the debenture in favour of the bank?
I take it you run a limited company? If so a company seal might be the only signature needed.

GlamGirlie

Any finance company providing a Ltd Co with finance will usually take a debenture as part of the package. This means other banks and building societies cannot open an account without the debenture-holder's permission.

You can check what debentures are registered at Companies House.

You do not say what the 'arrangement' was, so it is difficult to give you any further guidance on here, however if your arrangement was with one company and you bank with another, it is nothing to do with the bank at all.....

UNLESS......

The Bank opened an account for you without seeking the debenture-holder's permission. In which case, as soon as Companies House alerts the debeture-holder to the fact that another provider has given you banking facilities, they are quite within their rights to freeze your accounts until the matter is resolved.

This relates to a legal ruling known as Clayton's Case, which determines that the first money in is the first money out - http://en.wikipedia.org/wiki/Rule_in_Clayton's_Case

I hope that helps.