urgent advise needed

mdstevensuk

Hi,
i'm a guarantor for some equipment for my husbands business. Other than that i have no input in his business.
The company we have the loan with have been phoning me every month a payment is due. My husband has made every single payment - sometimes a little late but never more than 2 weeks. They have now sent me a statutory demand for the foll 15k even though the payments are being met. Can they do this?.
I don't have the funds or equity in my home which is in my name from a previous marriage my husband hasn't paid anything to me for the last 4 years whilst trying to build his business.

[Deleted User]

What do the terms say about the implication of missed payments? Does the debt become immediately due?

CakeCrusader

You need to check the loan documents. Lenders are usually not very happy if payments are made late, and 2 weeks late, even once, can be enough to upset them. As you're the guarantor, they would have been trying to contact your husband first.

Brock_and_Roll

First things first - your relationship with your husband or his business is entirely irrelevant.


You have a provided a guarantee for some equipment finance contracts and as such are jointly and severally liable for the debt in the event of a default.


In terms of them sending you a demand for full payment, the answer to whether they can do this is Yes - but only if an non-rectifiable event of default has occurred according to the documentation.


My advice would be to check the finance document (not the guarantee doc) to see what the default clauses are, then speak to husband to see whether he has "triggered" any of these.

mdstevensuk

What i meant by saying i have no part in the business is that its his own limited company and the loan is for the limited company - not a personal loan. But i am well aware i am jointly liable.

We both went through the agreement last night and could find nothing in it to say that they could do this.
The only paragraph regarding late or non-payment say's that a default notice would be served if payment was not made within 30 days (which is fair).
He has contacted them about this and has got them to send a statement through which i have now seen. All the payment are there upto date.

Gambler101

I would suggest your husband makes sure that the loan payments are made on time from now on. Im sure that will solve the issue.

jonesMUFCforever

Can you lend him the money to make sure all payments are up to date?

This might be enough for them to call off the legal action for now.

mdstevensuk

jonesMUFCforever wrote: »

Can you lend him the money to make sure all payments are up to date?

This might be enough for them to call off the legal action for now.

The loan is up to date. Only two payments have been late. Everything is paid what is owed to date.

We just don't get why they have done this. I work for my family as a purchase manager - so i do understand the basics of accounting.

Candyapple

mdstevensuk wrote: »

The loan is up to date. Only two payments have been late. Everything is paid what is owed to date.

We just don't get why they have done this. I work for my family as a purchase manager - so i do understand the basics of accounting.

Some companies operate this way - make 1 or more late payments and they have the right to request the full amount to be settled immediately.

Have you spoken to the company since and tried to reassure them that there will be no more late payments from hereon out?

mdstevensuk

Yes my husband has.
They don't seem to want to listen. I have read that they should have sent out a notice of some sort to him first to let him know what was going on.
He has been honest and straight with them with the two late payment and they seemed fairly understanding. He had also tried to arrange with them to move the payment date to the middle of the month and not the end when he has wages to pay, but refused to do that.
I have also emailed them a response to say i have no savings/assets or equity and that my income only just covers my day to day living. My car is an old banger and we don't go out, so its not like i'm trying to avoid paying them. Believe me if i had the 15k to get shot of then i'd pay it.

robber2

What did you tell the loan company about your income and assests when they accepted you as a guarantor? I guess they were happy that your income would be sufficient for them to come after you for repayment if required. The only time they may become slightly interested in your outgoings is if the loan goes into default.

Given the likely outrageous interest on a guarantor loan you would have been better off simply borrowing the money in your name and lending it to his company. It may be cheaper for you to do this now to pay off the exisitng loan but this would depend on affordabilty, your current level of income and debt.

Rob