Shoosmiths Bankruptcy Petition

sjl24

Hello,

So a bit of background.

In 2008 I took a business loan out with RBS, I was only 22 out the time. The loan was for £25,000, and I kept up with payments for 12 months. Unfortunately, the business didn't work and it was dissolved in 2010. I didn't realize at the time that I had signed a deed as opposed to a personal guarantee. The last payment was made against the loan in 2010, and no further correspondence was received until 2018. I understand a deed has a statute of limitation of 12 years as opposed to 6 years.!

Mid way through last year, I received a statutory demand for £23,496 from Shoosmiths regarding the debt, I did not have this set aside, and a bankruptcy petition was made. I agreed to pay Shoosmiths £1000 a month for 6 months as a full and final settlement, unfortunately I was unable keep up with these payments, and another Bankruptcy petition has now been made. I have offered to pay £300 a month over 24 months as a full and final settlement, however this has been declined due to failure to keep up with a previous payment arrangement. They are demanding £16,000 upfront which I cannot afford right now. The date for the hearing is the 31st of May, so the opposition needs to be entered over the next couple of days.

I have recently started a business, this is my only source of income, so to be made bankrupt would completely ruin my business and my income for the foreseeable future.

I do have a family friend solicitor who is helping me out free of charge, however I am unsure what the chances of the argument standing up in court are.

His arguments are:

1. The debt is older than 6 years, and no judgement was entered, payments made or disputed within 6 years of the final payment date made to RBS. I understand a deed has a 12 year limitation, however he is stating that as the actual debt is statute barred, there is no debt for the deed to guarantee.

2. RBS do not have the original credit agreement, and they cannot prove the amount of the debt.

3. The bankruptcy petition has stated that the guarantee deed was dated 21st May 2012, however the guarantee deed was actually dated 2009.

What are the chances of these arguments holding up in court? I am extremely concerned about going bankrupt. I understand I should have kept up with the original payment plan, and only have my self to blame. However I am unsure if the amount they are quoting is even correct as I have not seen a credit agreement as they have lost it.

Any help would be appreciated.!

JCS1

As a deed the limitations is 12 years, I suspect you could have issues trying to argue that


Statutory limitation periods for breach of contract and tort claims
The Limitation Act, passed in 1980, specifies the limitation periods which apply in relation to what it terms 'simple contracts' and deeds. The Limitation Act allows actions for breach of contract and tort, such as negligence, to be brought within a period of six years under a simple contract and twelve years if the contract is executed as a more formal deed. Under English law, a 'simple' contract is one which is executed with one signature only. A deed is a contract or document executed with higher formalities than a single signature - for example, a contract that must be signed by two directors on behalf of a company.


https://www.out-law.com/en/topics/projects--construction/construction-claims/limitation-periods-under-english-law/

JCS1

If you do argue the 6 year thing, then it is only statute barred 6 years after the last payment or when you acknowledged the debt in writing (whichever is most recent). As you made payments last year, you would have another 5 years before you could argue this.

sjl24

Would it make a difference if it was already statute barred from before the last payment was made?

But given that it's a deed, I can't see this standing up anyway.

broaps

If they don't have the original paperwork how can they prove it was a deed rather than just a personal guarantee?

sjl24

broaps wrote: »

If they don't have the original paperwork how can they prove it was a deed rather than just a personal guarantee?

They have the deed, they have sent it to me, I can upload it if would be of use?

They don't have the original loan agreement however.

fatbelly

The court will make the final decision on this but I think you're on the right lines to say that it became statute barred in 2016 and stays that way (LA 1980 s29(7)).

You could try Business Debtline for their opinion

sjl24

I think the issue with the argument is that the deed states 12 years. The solicitor is saying that the argument is that the debt is statute barred so there is no debt for the deed to cover, but I’m not sure if this will stand up or not.

fatbelly

Don't make the other side's arguments for them. Go in firm with your argument. It's a court - it can always go either way. The other side will know this too.