PLEASE HELP...LTD Company Debt, Personal Guarantee Problem..

SBW_2

If someone could please offer any advice I would be very grateful.

I'll try to be as concise as possible. I was in a business partnership and we formed a limited company. We were offered help and funding from a local company, they gave us a small grant, directed us to HSBC who they partner with to get a loan (backed by the DTi) and offered us the chance of a loan should we need it. We did!, it was signed by both of us, offering personal guarantees, the only way we could get the money. We got burgled after being open 2 months, the bank wasn't very helpful, and it took the insurance company 6 months to sort out the claim, by that time we were pretty much winding up and ended up having to liquidate the company. Through them struggling times neither of us were paid as company directors, and could receive no benefits so needless to say debts racked up.
My business partner took bankruptcy, I thought it would be too much of a problem in the future so went on an IVA. With very little income that soon defaulted.

Now to the point, and my concern;
The company who gave us a £15,000 loan took out a CCJ against me for the full amount. Apparently thats standard practise with business partnerships, I didn't know so am now paying this back along with lots of utility debt at an unaffordable rate. I've being through the original agreement we signed for the personal guarantee and I can see no wording that states should one person in a partnership default the entire debt lands on the other partner. Can it be contested. Not only was I not aware of my liabilities, but was offered bad advice in terms of banking as when we were struggling HSBC offered us no assistance and all they did was demand their monthly repayments and eventually proceed with our winding up.

Can anyone please help?
Thank you.

i_want_to_believe

http://en.wikipedia.org/wiki/Joint_and_several_liability

Rosco32

Sorry to hear what has happened. I would have also considered going bankrupt but I suggest you speak to your local citizens advice and see what they say.

DaveTheMus

SBW wrote: »

Not only was I not aware of my liabilities, but was offered bad advice in terms of banking as when we were struggling HSBC offered us no assistance and all they did was demand their monthly repayments

If you were a standard customer, you would be able to go to a regulatory body regarding the bad advice and such.....However, i think that if you're a commercial entity you are meant to carry out proper due diligence and if you didn't the responsibility is ultimately your own......from what I understand in business to business relationships the onus is on you....

londonTiger

!!!! mate. Hope you manage to sort everything out. I think you need professional help from someone who can look into your personal circumstance.

Not sure if CAB will be knowledgeable enough though. but worth booking an appointment to see what they can help with (you'll have to check if they will advise on directors/businesses)

opinions4u

I can see no wording that states should one person in a partnership default the entire debt lands on the other partner.

You are liable for the lot. So is your partner. It's the same with joint credit commitments made to two individuals.

Can it be contested.

I doubt it. Take advice by all jeans.

Not only was I not aware of my liabilities ...

With the greatest respect, you had the opportunity to take advice regarding your liabilities before signing up to them. You could have paid a solicitor to go over the contract. Did you?

gb12345

opinions4u wrote: »

You are liable for the lot. So is your partner.

But the partner chose bankruptcy, so now the whole lot is with the OP - no one will be chasing the partner as he took the easy route.

Crystallady

It's unclear from your post whether the loan was in the partnership name or the Limited Company - I suspect it was the Limited company and the CCJ is in respect of the personal guarantee you gave.

When you signed the guarantee, which I assume is for the full amount of the loan plus costs, you should have received independent legal advice (usually from your own solicitor) which explained the full extent of your liabilities under the guarantee. If you were not given the opportunity to receive ILA you could go to the courts and argue that you were not fully aware of your liabilities however this is really clutching at straws as you are expected as a Company Director to have undertaken due diligence.

If you did sign the guarantee at solicitors and you were not told the extent of your liabilities then you may have an case against the solicitor.

Hindsight is a wonderful thing and obviously it would have been better for you to have gone bankrupt rather than enter into an IVA as unfortunately by going bankrupt your co director has left you with all liability for the guaranteed loan.

londonTiger

What's the total debt incurred? It doesn't sound like a lot. I presume there is more debt than just the £15k. Post the full picture and board users might be able to guide you better. I mean if you have more debts coming in the total sum of £60K then that's a different scenario than just £15K.

What others have said is right though, you're going to be held responsible for the full £15K and can't be split with someone who declared bankruptcy. A bit of a cowardly thing to do for your partner but that's business.

londonTiger

Crystallady wrote: »

When you signed the guarantee, which I assume is for the full amount of the loan plus costs, you should have received independent legal advice (usually from your own solicitor) which explained the full extent of your liabilities under the guarantee. If you were not given the opportunity to receive ILA you could go to the courts and argue that you were not fully aware of your liabilities however this is really clutching at straws as you are expected as a Company Director to have undertaken due diligence.

How can a debtor under any circumstances regardless of whether they are directors, sole traders or even personal borrowers ever skirt away from the debts by protesting they did not seek independant legal advice. Why should the creditor pay because the debtor was irresponsible (or miscalculated the risks)

spacey2012

I think we can work out who was the brains in the partnership.
Talk about leaving you holding the baby.
I would start saving the bankruptcy fee up and getting your head around the forms.