Funding Circle personal guarantee

_BOSS_

Hi all,
This is my first post on the forum after doing a lot of reading so a big hello to you all.
My little problem is that Funding Circle are activating their claim against the personal guarantee that I signed when taking out a loan as part of a now dissolved limited business.
As the business folded due to health issues I clearly had no income, and although I am working now, I am not earning anywhere near enough to cover my liabilities, all of which are unsecured except for this Funding Circle loan.

They recently sent a court claim form to me with the amount owing along with court fees and legal representatives costs to be announced. I telephoned Funding circle to inform them of my situation and offer a 10% of the amount owing as a settlement before thinking about bankruptcy. They stopped the court action whilst they considered my offer.

After considering the offer they declined given that it is not Funding circle themselves who lend the money so they are now going to seek judgement in respect of the debt outstanding.

The personal guarantee was not secured on anything and there is no mention of any specific item in the PG.

My question is: What should I do to make this go away given that I can not afford to pay what is owed and would not want to be paying for the rest of my life at a silly reduced rate.

Thank you for any help.

[Deleted User]

I would think bankruptcy is the only option if you really don't feel like paying it back.

Ben8282

_BOSS_ wrote: »

Hi all,
As the business folded due to health issues I clearly had no income, and although I am working now, I am not earning anywhere near enough to cover my liabilities, all of which are unsecured except for this Funding Circle loan.


….

The personal guarantee was not secured on anything and there is no mention of any specific item in the PG.

.

A bit contradictory. Is the loan secured or unsecured?

jonesMUFCforever

If it is the case that the guarantee was taken without security to back it up then it is a worthless piece of paper!
Make them an offer that you can comfortably afford to pay monthly (the 10% was a bit of a joke offer).
If it was me I would want to avoid bankruptcy - but to each their own.

_BOSS_

Thank you for taking the time to reply.

@ Ben8282, The loan was covered by a PG which I believe renders it secured although there is no mention of anything being secured against it. I think the wording is something along the lines of I become personally liable for the money owed if the company fails to pay.

@jonesMUFCforever

If it is rendered a useless piece of paper then what should I do if I receive further court papers? should I just ignore them or challenge it in court somehow?

Ben8282

No need for bankruptcy. If the loan is unsecured and you are unemployed due to ill health they can't get blood out of a stone

diggingdude

Ben8282 wrote: »

No need for bankruptcy. If the loan is unsecured and you are unemployed due to ill health they can't get blood out of a stone

OP is working. Do you own a house?

_BOSS_

Yes I do own a house jointly with my wife. There is some collateral in the property which would more than cover the amount owed but I obviously do not wish to sell or be forced to do so. Refinancing is not an option as my credit rating will be through the floor right now, that I can cope with.
I am aware if I go bankrupt then I would likely have to sell the property and if I chose the route of an IVA I may get to keep it.
Its this one debt that is going to cause me problems so all ideas are welcome.

jonesMUFCforever

_BOSS_ wrote: »

Thank you for taking the time to reply.

@ Ben8282, The loan was covered by a PG which I believe renders it secured although there is no mention of anything being secured against it. I think the wording is something along the lines of I become personally liable for the money owed if the company fails to pay.

@jonesMUFCforever

If it is rendered a useless piece of paper then what should I do if I receive further court papers? should I just ignore them or challenge it in court somehow?

They take you to court - they win - the judge looks at your financial situation and says = you pay £x amount per month.
Had the loan company put a charge on your home to secure the loan (as most lenders would) you would be looking at possibly losing your home.
IMO don't worry too much - you know you owe the money - they know that like another poster said you cannot get blood out of a stone.
Make a reasonable offer to repay and see how you go.

warby68

You're unlikely to be able to just make it 'go away'.

I'm not sure the view that without tangible security its a 'useless piece of paper' holds up. As a guarantor you are still on the line. However most collections teams will prefer a mutually agreed payment arrangement above court action etc.

Depending how large the debt is or how cooperative they perceive you to be they can pursue insolvency for you themselves but that would usually be a last resort.

In between those two they can apply for charging orders on your property to maintain some claim on your assets. I may be wrong but I think Funding Circle also ask for a full charge on your property sometimes if your payment offer is below a certain threshold.

Making contact and keeping talking to them about what you can offer is most likely to get the most reasonable outcome for you. Ignoring them and waiting for court action possibly not, especially if you do have assets in the background. Its not just about your income.

Kelly156

I am about to go to court as funding circle do not adhere to any of their collection processes they say they offer.

I would be interested in speaking to anyone who has had a loan from funding circle via an agent or directly from them.

If anyone is thinking of taking a funding circle loan avoid at all costs...