Personal Guarantee Help!

JuicyJesus

bigadaj wrote: »

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

Staff are employees. The OP is the owner of his insolvent business; his parallel with RBS would be its shareholders. RBS' shareholders, if you wish to take a gander at the price of RBS Group shares compared to their 2007 levels, are very much out of pocket as a result of Goodwin's stunning success at running a bank.

Also, RBS isn't and wasn't insolvent.

John1993_2

JuicyJesus wrote: »

Staff are employees. The OP is the owner of his insolvent business; his parallel with RBS would be its shareholders. RBS' shareholders, if you wish to take a gander at the price of RBS Group shares compared to their 2007 levels, are very much out of pocket as a result of Goodwin's stunning success at running a bank.

Also, RBS isn't and wasn't insolvent.

Don't confuse him with facts, he prefers to navigate life on prejudices instead.

And to reap the "benefits", of this bizarre choice.

JuicyJesus

John1993 wrote: »

Don't confuse him with facts, he prefers to navigate life on prejudices instead.

And to reap the "benefits", of this bizarre choice.

I live in hope that one day one of these people who talk a load of utter nonsense will turn around and say something like "you're right, I was being a tool" when it's pointed out just how ridiculous the things they're saying are.

There's probably more chance of me having to shoot porkchops down from the sky, but a little hope is healthy I think.

bigadaj

Nice you agree with each other. We don't k ow specific details but the OP has out himself on the line, including a personal guarantee that may well now leave him homeless. He may have been naive in taking this on, and should potentially have taken financial and legal advice but he did have skin in the game.

I have no problem with capitalism so long as it is consistent and the British financial and banking system aren't that. Inflated bonuses and salaries because we need to recruit the best staff, and when rbs and lloyds need to be bailed out then we need to pay those staff to retain their fantastic qualities. So the ultimate capitalist businesses then need to be nationalised, such a sane and rational system!

The us at least has the balls to leave allow bust businesses to be liquidated, and use legal measures against excessive and extreme finnancial practices.

JuicyJesus

bigadaj wrote: »

Nice you agree with each other. We don't k ow specific details but the OP has out himself on the line, including a personal guarantee that may well now leave him homeless. He may have been naive in taking this on, and should potentially have taken financial and legal advice but he did have skin in the game.

Naivete does not mean you are not bound by a contract.

It was his business. He ran up debts through it that it could not repay. He signed a personal guarantee - a very straightforward document with clear effect and intent - to guarantee those debts would be repaid. It's all very well saying he may be left homeless, and in that sense I have sympathy for him, but that doesn't mean the bank did anything wrong by asking him for and holding him to a personal guarantee.

I have no idea what you mean by "skin in the game" or what significance you think it has to anything.

I have no problem with capitalism so long as it is consistent and the British financial and banking system aren't that. Inflated bonuses and salaries because we need to recruit the best staff, and when rbs and lloyds need to be bailed out then we need to pay those staff to retain their fantastic qualities. So the ultimate capitalist businesses then need to be nationalised, such a sane and rational system!

I'm not going to defend RBS and Lloyds paying inflated bonuses. But you have to admit, in this discussion, it's totally irrelevant.

The us at least has the balls to leave allow bust businesses to be liquidated, and use legal measures against excessive and extreme finnancial practices.

Do you understand exactly what negative consequences for everyone would be unleashed if RBS and Lloyds - or even RBS OR Lloyds were simply "liquidated"? I'm sure such a thing sounds lovely in a "punish Fred The Shred" sense until you think about exactly what banks actually do.

Crystallady

ljohnson wrote: »

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.

I'm sure the bank didn't hold a gun to your head and "make" you sign the PG, you chose to do it so that they would advance you money for your business.
As far as getting out of paying it back, your solicitor should have explained when you signed the guarantee and supported it with a charge over your house - the bank now has the right to look to you personally for full repayment and take any equity there is in your house towards it.

redpete

ljohnson wrote: »

...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...

Seems the bank weren't convinced that the business plan was sufficient guarantee for the loan and wanted more security than that. Their decision seems to be justified - the business failed. They gave you a chance to make a go of the business by giving you a loan in the first place but were not happy to take all the risk on that money themselves. If the gamble had paid off and you were making lots of money I doubt that you would be offering the bank more money because of the success.

spacey2012

What was the bad debt ? invoicing credit ?
That is where you do work and bill for it later, basically giving the other firm free credit to trade with.
They then get the money from their customer and dissolve the company leaving you out of pocket and just paid all their debts .
A lot of small bushiness, particularly building trades fall to invoicing credit as they are not aware of how to secure credit given and use credit checking reference agencies .
Basically they skrew you over .

Caladan

redpete wrote: »

Seems the bank weren't convinced that the business plan was sufficient guarantee for the loan and wanted more security than that. Their decision seems to be justified - the business failed. They gave you a chance to make a go of the business by giving you a loan in the first place but were not happy to take all the risk on that money themselves. If the gamble had paid off and you were making lots of money I doubt that you would be offering the bank more money because of the success.

Most banks will request a personal guarantee and/or charge over a property if the lending is above a certain amount, regardless of how viable the business is.

Even major corporates have to put up security for their financing, regardless of their profit or turnover.

CKhalvashi

Caladan wrote: »

Most banks will request a personal guarantee and/or charge over a property if the lending is above a certain amount, regardless of how viable the business is.

Even major corporates have to put up security for their financing, regardless of their profit or turnover.

I haven't had to for a loan taken out last year (7 figures), but that's another story for another thread.

I do have a lot of sympathy for OP, and that is because I'm in business myself. Whilst I've never had anything go into administration, it has come close to it, especially in the early years.

OP, the advice I can give is to contact Business Debt Line, and ask them to negotiate with the bank. Can you please give us a guide as to what the amounts we're talking are, as then we can give more advice.

It may be a case of offering £1 a month for a few months, and trying to reach a payment plan when you've found alternative income, or if this will be hanging over you possibly for the rest of your working life and/or part of retirement, we may advice bankruptcy/IVA as a solution (although please bear in mind that we are not qualified to give insolvency advice on a forum).

If you can prove to the bank that you're trying, you may be able to salvage something from this.

CK