joint and several liability, joint overdraft converted to loan not in my, am I liable

jam_tomorrow

Hi, hoping someone can advise me on the following.

I had a joint business overdraft with my husband which was taken out in 1991 it was secured via a second mortgage on the business property.
We split eight years ago and he continued with the business. Four years ago he took out a flexible business loan in just his name (don't know whether this was a consolidating loan for overdraft or not)

He has now been made bankrupt and the bank are chasing me for the loan repayments on his loan agreement (a copy of which I have, there is no mention of it being secured against the second mortgage)

My question is, can I be liable for his loan and can they use the security of the second mortgage if it is not stated in the loan agreement?

JohalaReewi

Technically, the business loan is his loan and nothing to do with you.
But the joint business account / overdraft is.
Is the joint account still active?

It may be that the bank has raided the joint account to pay the business loan and you are now being chased to settle the joint account.

Archi_Bald

Best get a solicitor, or pop into the nearest CAB for some legal advice.

jam_tomorrow

As far as I can remember we had one joint business account and two joint personal accounts.
During a meeting in branch in 2005 (after our split) my husbands name was taken off one of the personal bank accounts for me to use as my own account, my name was taken off the other two accounts for him to use as his.
The demand letter from the bank states an account number that they have since confirmed does not bare my name.

jam_tomorrow

Sorry forgot to answer question, I don't know whether the original account is active or not, I think he may have opened another one.

Crystallady

If your name isn't on the loan account paperwork and you haven't signed the agreement then you are not liable even if it paid off the joint overdraft. As far as the 2nd charge is concerned that's a bit more complicated - if the loan is secured by the charge it should say so in the paperwork, however there is probably an "all monies clause" in the charge form which may allow the bank to use the charge against any borrowing. I say "may" because it depends on who owns the asset and who signed the charge form and what agreement you came to in 2005 when you split the accounts.

jam_tomorrow

Okay, well I'm definitely not named on the loan agreement or signed it and the loan agreement definitely doesn't refer to any security whatsoever so I will now go and see if I can find the original 2nd mortgage paper work

jam_tomorrow

I have a copy of the 2nd mortgage dated 1992 it states:
(The debtor) to the bank whether on account of money's advanced bills of exchange promissory notes guarantees indemnities interest commission banking charges and whether incurred solely severally and/or jointly and all legal and other expenses (on full indemnity basis) howsoever incurred by the bank in connection therewith and so that as against the mortgagor interest shall be deemed to continue to accrue and be a liability of the debtor hereby secured notwithstanding that for any reason interest may have ceased to accrue against the Debtor. Provided that the total amount recoverable under this mortgage shall not exceed twelve thousand pounds.

Any idea what this means?

Crystallady

It looks to me like the 2nd mortgage covers all debts to the bank(money's advanced) "whether incurred solely severally and/or jointly", so it could be used against the loan as this was incurred solely by your ex. However the good news is that the charge is limited to £12,000.

jam_tomorrow

Thank you for that (like a different language to me)
Not sounding to hopeful then but at least I know now and can start to deal with it.
Many thanks again for your advice