Personal Guarantee - how to agree a settlement with Bank

vincentpope

My limited company went into adminstration at the end of 2017. Back in 2007 I had signed a personal guarantee but I did not remember doing this and only found out when the bank wrote to me to demand the 25k liable against the PG.

I tried to challenge this with the help of a solicitor without success. Ideally, I want to try and reach a settlement with the bank to avoid paying the full 25k. Does anyone have any tips of how best to try and negotiate this with the bank?

foxy-stoat

You can include this debt when you go bankrupt or take out an IVA, have you got much other personal debt? Probably get out of paying 75% less than you owe.

MEM62

I am sure that your solicitor made you familiar with your personal liability as guarantor. The amounts is large enough that the bank is unlikely to let this drop - particularly if you have any assets. If you have no assets then you might be able to negotiate on the basis that the deal or you declare BR.

antrobus

vincentpope wrote: »

My limited company went into adminstration at the end of 2017. Back in 2007 I had signed a personal guarantee but I did not remember doing this and only found out when the bank wrote to me to demand the 25k liable against the PG.

I tried to challenge this with the help of a solicitor without success. Ideally, I want to try and reach a settlement with the bank to avoid paying the full 25k. Does anyone have any tips of how best to try and negotiate this with the bank?

The only way you can "avoid paying the full 25k" is to convince the bank that you don't have the 25k and never will.

Put it this way; do you own a house? They'll take that if all else fails.

jonesMUFCforever

Normally a guarantee would be supported by a charge on your property - is this the case here?
If that is so then it is secured lending - they will get it by forcing you to sell your property.

A guarantee without supporting security is an useless piece of paper - if this the case then the bank deserves to lose their money.

bris

foxy-stoat wrote: »

You can include this debt when you go bankrupt or take out an IVA, have you got much other personal debt? Probably get out of paying 75% less than you owe.

What makes you think the OP will go bankrupt? It's the ltd co in administration not the OP. The personal guarantee has nothing to do with the company.


If the OP has assets they will take them.

foxy-stoat

bris wrote: »

What makes you think the OP will go bankrupt? It's the ltd co in administration not the OP. The personal guarantee has nothing to do with the company.

If the OP has assets they will take them.

I know, the OP has a personal guarantee with the lender, the OP doesn't want to repay the full £25,000 that he signed up to so wants to make "an offer" - assuming he doesn't have the full £25,000 or has no money to repay it. If he has other personal debt he can default and go into an IVA or BR - the lender will end up with 25% of the £25,000 and in 5 years he will be debt free rather than spend the next 5 + years repayment the £25K that he doesnt want to pay.

Just an option

jonesMUFCforever

foxy-stoat wrote: »

I know, the OP has a personal guarantee with the lender, the OP doesn't want to repay the full £25,000 that he signed up to so wants to make "an offer" - assuming he doesn't have the full £25,000 or has no money to repay it. If he has other personal debt he can default and go into an IVA or BR - the lender will end up with 25% of the £25,000 and in 5 years he will be debt free rather than spend the next 5 + years repayment the £25K that he doesnt want to pay.

Just an option

I disagree.
If the guarantee is secured the OP will be forced to sell his house - the first mortgage lender will get their money then any surplus will go to the guarantor's bank to offset the guarantee.
As he signed the guarantee in 2007 there is a good chance that the valuation of his house has increased considerably.

kencharm

i need to take a loan to complete a project this is really insightful