Personal Guarantee Help!

ljohnson_2

My business has gone bust due to bad debt, having to close my business. I've instructed and Insolvency Practitioner to handle it. Everything seems fairly straight forward, if rather sad and expensive, but the real problem that has become apparent is a PG I had with my bank and this relates to a business loan to help finance the company when I bought it. Then bank made me sigh a personal guarantee and put a charge on my house. At the time it was either sign this or don't get the money. Now because I've putt he company into administration, I've recvd a letter form my bank demanding the money personally from me. Can anyone suggest a way I can avoid paying this, because my financial situation is currently not very good.

[Deleted User]

Bankcruptcy, I suppose.

Clive_Woody

Deleted_User wrote: »

Bankcruptcy, I suppose.

If there's equity in the house that may not work...although I am no expert.

One of the nice folk on the bankruptcy board might be able to advise.

Good_Goose

No way to avoid paying it. Either you will pay them now or when your house is sold.

DevCoder

The bank had you sign a personal guarantee to limit their risk, any new business (or even existing) carries a certain element of risk for the bank so a credit decision is easier for them if there is collateral (ie your house)

There is no way to avoid paying them back, they are holding any equity in your house and can force a sale through (although this will take a while)

what mortgage do you have on the property? how much do you have left to pay on the mortgage and how much is the house worth now (realistic!).

Answer those questions will help with any advice, also is the bank that has this charge on your property also the bank with the mortgage charge (if any) ?

JuicyJesus

Good_Goose wrote: »

No way to avoid paying it. Either you will pay them now or when your house is sold.

This. Personal guarantees specifically exist to ensure that debts will be repaid even if the business is made insolvent. It would have been "sign this or don't get the money" because otherwise they could be throwing money down a hole with nobody to pursue for it.

bigadaj

JuicyJesus wrote: »

This. Personal guarantees specifically exist to ensure that debts will be repaid even if the business is made insolvent. It would have been "sign this or don't get the money" because otherwise they could be throwing money down a hole with nobody to pursue for it.

If only this could have been applied to Fred goodwin and other staff at rbs and hbos etc

Good_Goose

bigadaj wrote: »

If only this could have been applied to Fred goodwin and other staff at rbs and hbos etc

Relevance to the thread = none.

John1993_2

ljohnson wrote: »

MCan anyone suggest a way I can avoid paying this, because my financial situation is currently not very good.

No, but why would you even think of not paying? It's your debt, and you need to pay it back.

John1993_2

bigadaj wrote: »

If only this could have been applied to Fred goodwin and other staff at rbs and hbos etc

That makes no sense at all. Fred Goodwin did not ask for a personal loan, he ran a bank.

Do you understand the difference between working for a company and owning one, as you seem not to?

bigadaj

John1993 wrote: »

That makes no sense at all. Fred Goodwin did not ask for a personal loan, he ran a bank.

Do you understand the difference between working for a company and owning one, as you seem not to?

Skin in the game is the phrase that I think is pertinent.