Help I signed as a guarantor 6 years ago

snow55

Can anyone please help me with this problem?
8 years ago my husband and I owned our own estate agency business, which was a ltd company, we took our a loan at the time for £80,000 with the HSBC, however both my husband and I and my mother inlaw and father inlaw all signed as personal guarantors for the loan, 2 years later our company went bust and my husband and I lost everything, we lost our home and had to move our family to rented accomodation. the HSBC chased us for a few years looking for the money but then stopped when they realised that we really had no means of paying this off, they then chased my inlaws who have lots of assets and property, they went to court and my inlaws agreed with the HSBC on a full and final settlement sum of £40,000. We all understood at the time that this was the end of the problem, however last week my husband and I recieved a letter each from a debt collector for the remaining £40,000, we are in shock, we have never managed to get back on our feet again financially and still live in rented accomodation and will never be able to pay this debt.
The bank are now saying that the money paid by my inlaws only covered their part of the guarantors liability, we were all under the impression that we were all fully responsible for the full debt, my inlaws paid their solicitor a lot of money to negotiate the settlement figure down from £80,000 to £40,000.
Does anyone know if the banks can do this, is this common practice, do we have any way out of this?
We are becomming desperate at this stage.
Thank you,
Snow55

blue_haddock

You need to check the paperwork that was drawn up at the time and make sure it really does state "full and final settlement"

FinanceForEveryone

So the bank sold your debt onto a debt collecting agency. They are probably able to do this but not sure how far the debt collection companies can go - probably quite far as they specialise in it.

I'd say it all comes down to the settlement agreement that your in-laws solicitor's negotiated with HSBC. Read that thoroughly if you can find it. Maybe there's a part in there that says they can sell the part of the original debt on!? If so, maybe I guess you're back to square one, trying to convince them you really can't pay...?

snow55

the paperwork definately says full and final settlement, but the bank are now saying that this only refers to my inlaws part of the guarantor agreement, this is what is confusing us, as we understood that as a gurantor you are all equally responsible for the full amount of the debt, do you know if this is the case? or can there be different types of guarantors?
Snow55

snow55

the paperwork definately says full and final settlement, but the bank are now saying that this only refers to my inlaws part of the guarantor agreement, this is what is confusing us, as we understood that as a gurantor you are all equally responsible for the full amount of the debt, do you know if this is the case? or can there be different types of guarantors?
Snow55

toddle2u

It sounds like full and final settlement for your in laws. If you and your husband aren't specifically included as being part of the F & F agreement then you are liable for the balance

CLAPTON

Asthe loan was joint and several there is no such thing as one persons 'share' of the oan.
Either you all owe it or no-one owes it.
Try ringing the national debt line and getting some free advice

http://www.nationaldebtline.co.uk/

iolanthe07

I think someone is trying it on here. The whole point of guarantor loans is that all the signatories are equally liable for the whole debt. Therefore if your parents-n-law negotiated a full and final settlement of the debt, that should be the end of it. Don't pay anything unless you have received cast iron professional advice.

somethingcorporate

Yep, joint / guaranteed loans would be done on a joint and several basis so that F&F should cover the whole agreement as per Clapton's post.

ILW

CLAPTON wrote: »

Asthe loan was joint and several there is no such thing as one persons 'share' of the oan.
Either you all owe it or no-one owes it.
Try ringing the national debt line and getting some free advice

http://www.nationaldebtline.co.uk/

I do believe that a party can buy themselves out of a guarantee, this would not let other guarantors off the hook though.

poppasmurf_bewdley

Go back to the solicitors who did the original negotiation and agreement. If they missed something, then it's down to them to make amends.