County Court Claim for Guarantor :(

getmeouttahere

I wondered if anyone could help with this...

Used to have a ltd company that purchased some computer equipment via lease purchase, to which I gave a personal guarantee. The initial finance amount was £6772.50 including vat. My ltd company became insolvent and ceased trading. I continued to make payments as much as I could, but lost my job, and entered a token payment plan with StepChange. The lease finance company wanted their equipment back before they would discuss any repayment plan, but I don't have it all (that's a story for another day).

There's £3537 outstanding and the contractual payments were £189 per month inc vat. I offered the finance company £100 per month (against the advice of StepChange), but they initially refused. They eventually accepted and said I could keep the equipment, on the condition that StepChange approve, but obviously, they wouldn't, so we were back to square one where they want their equipment back.

I have pointed out that the value of the equipment is significantly lower than the amount outstanding, and I will likely end up with additional fees after the sale because the resale value will likely not cover the fees, let alone anything else, but the still want it back.

So, after trying to intimidate me by threatening a statutory demand (and me reminding them that the debt isn't over £5000, they cannot do that), they sacked off the debt recovery company, and the result of what's seemingly a stalemate, is they have now issued a court claim and slapped on £360 of interest.

Anyway, a few of questions I have...

1) Now that the finance company are chasing me as the guarantor, are the debts now consumer debts? If so, as I've paid more than 50% of the one finance agreement, would I be able to hand the equipment back with nothing further to pay?

2) The finance company originally issued VAT invoices to the ltd company, and have since issued credit notes for the unpaid balance. I have asked on numerous occasions for vat invoices for the remaining payments but they have refused. Are they allowed to do this? I am currently vat registered and reclaiming the vat on these invoices will give me a lump sum that I can pay them, but they're not willing to play ball.

3) I don't deny owing the company the money but how can I make a realistic offer to the court that the court will accept? If the court accept an offer and the finance company aren't happy, can they still take it to the high court, or do they also have to abide by the judges decision?

Thanks in advance

National_Debtline

Hi

The debt will not become a consumer debt and the original contract terms still apply. The 50% termination rights only apply to some forms of finance agreements such as hire purchase and conditional sale. You can check the credit agreement for an explanation of your termination rights. In any case, these rights only apply where the debtor hasn’t already defaulted on the contract.

For your second question I suggest you seek some specialist advice from Business Debtline.
www.businessdebtline.org

You can certainly make an affordable offer on the court claim. The court doesn’t need to keep the creditor happy, they need to be impartial and determine a fair rate of repayment based on your current financial circumstances. Court judgements can only be enforced through the high court if the instalments set by the county court are not maintained, and if the debt isn’t CCA regulated.

James
@natdebtline