personal guarantee

aps42

Hi
I have recently brought a business and am starting to think i made a big mistake as am finding it alot harder than i thought. i had to give 2 big personal guarentees that are now sinking in and scaring the life out of me.
Im trying my hardest to make the business work but have still got that negativity in the back of my mind and so i want to know what can happen if all goes wrong and business goes down the pan and goes bust what happends and what are the proceeders with the personal guarantees

Mouse1812

Limited Company or Sole Trader?

toddle2u

Limited Company or Sole Trader

Irrelevant - it's a persoanl guarantee and therefore he's liable for the debts even if it's a Ltd Co.

Company folds goes intol Liquidation and the bank/lender come after him for the PG. Must have beleived he had assets to cover PG so if claim not settled they will go after assets. This is the simple answer based on the limited information given

Mouse1812

NOT irrelevant. A limited company may have other debts and options to shift those debts.

After 30 years working in this industry and specifically dealing with these problems... my question remains valid.

On one case I helped a client move over £100k away from PG and saved three family homes all with the approval of a pre chosen liquidator.

antonic

Also if there any HMRC debts and he is trading as a Ltd Co debts stay with the Co.

If trading as a Sole Prop or Partnership debts belong to him personally and will be pursued.

toddle2u

Also if there any HMRC debts and he is trading as a Ltd Co debts stay with the Co.

This concerns a PG not debts to HMRC

After 30 years working in this industry and specifically dealing with these problems... my question remains valid.

On one case I helped a client move over £100k away from PG and saved three family homes all with the approval of a pre chosen liquidator.

True the business could be pre-packed and the od/loan transferred along to new co but as the OP hasn't responded we will probably never know but it would appear that you didn't actually remove the PG but just gave them a chance to go again with their liability still in place? I'm not quite sure why you feel the need to mention 30 years experience as I've known people be in their chosen industry for far longer than that and there terrible at what they do and if £100K is the biggest you've dealt with in 30 years you haven't seen many big deals come your way!

alastairq

toddle2u wrote: »

This concerns a PG not debts to HMRC



True the business could be pre-packed and the od/loan transferred along to new co but as the OP hasn't responded we will probably never know but it would appear that you didn't actually remove the PG but just gave them a chance to go again with their liability still in place? I'm not quite sure why you feel the need to mention 30 years experience as I've known people be in their chosen industry for far longer than that and there terrible at what they do and if £100K is the biggest you've dealt with in 30 years you haven't seen many big deals come your way!

That is the biggest problem trying to respond to posters on this particular forum.

Care needs to be taken regarding how damning our responses are?

Limited information is a fact of life on this forum.......and teasing further information from the OP is bread-and-butter to most of us who inhabit these dark portals.

No question is irrelevant!

[Neither is any request for information/help stupid or misguided.]

It is as well to remember these things when considering taking snipes at other responders.

We are not on this particular forum to generate credibility.

We are here to offer support and advice, such as we know it...and usually based upon analysis of bitter experience.

Consideration of emotional states must be uppermost in our minds when considering a response.

For it is easy to forget that what we post is not simply to one individual, but to hundreds of others lurking in the background.

antonic

I only post on threads where I think I can be helpful.

If other posters disagree with me thats fine as this is an open forum and I wont get upset nor will I respond.

Mouse1812

toddle2u wrote: »

This concerns a PG not debts to HMRC

The OP’s question was much wider than that, I hope your abrupt responses have not scared him/her off.

toddle2u wrote: »

True the business could be pre-packed and the od/loan transferred along to new co

That is not the only option, indeed that is possibly the worst option which requires the agreement of the PG holders. Not your area of expertise then?

toddle2u wrote: »

it would appear that you didn't actually remove the PG but just gave them a chance to go again

Nope, I removed the debt (legally). Assume nothing, you will be wrong.

toddle2u wrote: »

not quite sure why you feel the need to mention 30 years experience

In the hope that some may derive comfort that I may actually know what I’m talking about. I care not if they don’t, but I do hope they can keep their comments constructive.

toddle2u wrote: »

if £100K is the biggest you've dealt with in 30 years you haven't seen many big deals come your way!

The deal was, and others have been, much bigger than that. You were only taking about PGs at this point.


So back to my original question which sadly remains unanswered by the OP - Limited company debts can be in a constant state of flux and not all of them are covered by PGs, that provides opportunity even when the total debt remains unaltered. Some planning and judicious timing can make significant differences in all cases.

This is why Jessops, HMV, 2e2, Republic and several others chose January to enter Administration and not November or December when they already knew they were in trouble.

Sole trader debts are personal debts giving no such opportunities. My question was therefore very valid.

toddle2u

So back to my original question which sadly remains unanswered by the OP - Limited company debts can be in a constant state of flux and not all of them are covered by PGs, that provides opportunity even when the total debt remains unaltered. Some planning and judicious timing can make significant differences in all cases.

You lost any sense of credibility with this nonsense statement.

That is not the only option, indeed that is possibly the worst option which requires the agreement of the PG holders. Not your area of expertise then?

And this one.

Mouse1812

Just admit you didn't understand it. Having reviewed some of your other posts I can see there are gaps in your otherwise apparent knowledge which leads me to wonder if you are a student?