Co-guarantor on a loan, but we think bank has no paperwork!

misterwillguitar

hello sirs,
this is my first post here, I like this site and am just trying to seek information. In 1998 I, along with two colleagues had a limited by guarantee company doing music with community groups.
The bank in question said we were eligible for a £4,000 business loan (after 18 months) so we signed. The loan was repaid over the term. Since our startup our turnover went to around £100k per year and the bank had a £10,000 overdraft facility.
We all left the business, but recently found our original agreement had us sign a guarantor agreement that apparently covered not just the loan but any debts the company would take on. The company is at its overdraft limit. One of us went to the bank to get a copy of his signed agreement and the bank couldnt provide it. He has been put to several departments, none of which could help over the phone.
Today he has been sent a demand for full repayment of the £10,000 from the bank, saying he needs to pay within 14 days. They still havent sent the original paperwork and signed documents (dating back from 1999 or 2000).
We are under the impression the bank hasnt got these documents, though kind of like PPI things we were almost talked into this without really knowing what it meant. Essentially we think the bank is trying to get him to make any sort of payment thus acknowleding liability for the overdraft - upon which that would make him legally liable for the debt.
We are just writing here to see if there is any advice or reccomended course of action/people to speak to. Many thanks for reading

sharpy2010

They can reconstitute a true copy of the agreement at the time it was signed, so you won't get out of paying it by claiming no agreement, sorry.

Emmzi

sharpy2010 wrote: »

They can reconstitute a true copy of the agreement at the time it was signed, so you won't get out of paying it by claiming no agreement, sorry.

That would refer to the loan but not the guarantee. Are they trying to get him to pay as an owner or as a guarantor and what paperwork was done to tell the bank of change of ownership? Was that done at a time of zero debt?

Regardless I think you are down to a "prove it" letter.

misterwillguitar

Emmzi wrote: »

That would refer to the loan but not the guarantee. Are they trying to get him to pay as an owner or as a guarantor and what paperwork was done to tell the bank of change of ownership? Was that done at a time of zero debt?

Regardless I think you are down to a "prove it" letter.

The loan was paid off in the period (3 years I think), but dealt with a long time ago. They are basically referring to the original guarantor agreement - the company was limited by guarantee (no shares) so everyone is a member rather than an owner. Business loan and subsequent overdearft was granted to the actual company ltd by guarantee (not for profit). Since our leaving the company has incurred a debt on the overdraft and the current people wanted to close the actual company. They noticed we are named on the overdraft and got in touch and thats the situation we find ourselves in

Emmzi

if it's a limited company that owns the account that is overdrawn you can't be named as an indivdual"on" the overdraft but you can be named as a guarantor "for" the overdraft.

Ask the bank to produce the guarantee.

Check if you are still guarantors for the company as a whole (if the guarantees the company was limited by still exist) - you need a solicitor to check that I expect.

misterwillguitar

Emmzi wrote: »

if it's a limited company that owns the account that is overdrawn you can't be named as an indivdual"on" the overdraft but you can be named as a guarantor "for" the overdraft.

Ask the bank to produce the guarantee.

Check if you are still guarantors for the company as a whole (if the guarantees the company was limited by still exist) - you need a solicitor to check that I expect.

Essentially that is what one of us has done - he asked for a copy of his agreement with the bank (signed copy). Said bank said they werent sure how far back records went. He got passed to several departments, and then through to some office. Three weeks and no copy of the agreement. Then yesterday he got a demand for payment for the whole of the overdraft. We contacted the people in the company who havent made any moves to shut it down yet. Also neither myself not the other named guarantor recieved any demand for payment. So yes, the next step is to continue asking for the copy of the paperwork.

Emmzi

then you had best relax as well as you can, because until they say they have or haven't got it, there's nowt you can do. Did you have a company solicitor at the time? If the bank released the g'tee sometimes your handy solicitor makes sure he has paperwork which confirms that.

misterwillguitar

Emmzi wrote: »

then you had best relax as well as you can, because until they say they have or haven't got it, there's nowt you can do. Did you have a company solicitor at the time? If the bank released the g'tee sometimes your handy solicitor makes sure he has paperwork which confirms that.

Yes sir thanks for that!
Our thoughts are - when the money demand was sent to one of us it was an attempt by the bank to get him to admit to being liable for the guarantee (ie if he paid anything with regard to that demand that would be an admission that he owed it). So the strategy of just asking for proof is the one we will continue pursuing!