Personal Guarantees from Insolvent LTD Company

2020hithard

Hey everyone, 

I'm looking for some advice. 

Me and my partner had a limited company which went insolvent in 2019. The company has now been liquidated by a IP. 

We have been hit with around 100k of personal guarantees for the company debt and over the past year we have been working with the creditors in paying them off. Due to coronavirus we have no income and we are looking at bankruptcy to release us from the debts. It's been a terrible year and all the debt problems have caused us both to have server mental health problems. 

I am very anxious about the OR interview and generally how much it will impact our lives. I would love nothing more that a fresh start and to be free from this hell. 

We have 2 other limited companies which are not trading and only 1 owes a small amount. We can't afford to hire a IP to liquidate them before we go bankrupt so I'm worried about this. 

Does the OR go into detail of our company or will it be more personally focused? Has anyone got any advice for preparing for the interview for a company director? We never did anything dodgy or fraudulent, we took a risk starting a business and it didn't work out. 

Sorry for the long post, hoping to get this done as soon as possible. 

Cheers x 

Brock_and_Roll

First things first - dont panic. Done nothing wrong. If you have no money they get any!
Million dollar question is what personal assets do you have? House with equity? Other assets?

luvchocolate

I would suggest you contact business debtline. They will give you the answers 

2020hithard

No assets or savings. Spoke to business debtline a few times but I'm looking for some advice from people who have been in a similar situations. I'm struggling to find things online. 

jonesMUFCforever

Are the guarantees supported by security such as property?
If they supported by guarantee then bankruptcy won't save you from your debts.
If the guarantees are not  supported by anything - go for it because they are a useless piece of paper worth nothing!

2020hithard

They are all unsecured debts. We have no assets and never have. 

TripleH

jonesMUFCforever said:

Are the guarantees supported by security such as property?
If they supported by guarantee then bankruptcy won't save you from your debts.
If the guarantees are not  supported by anything - go for it because they are a useless piece of paper worth nothing!

Sorry, could you clarify please (brain is muddled). Why would bankruptcy not save them from their debts?
2020hithard, if yiu do go bankrupt, you would be unable to act as a company director. Do you havecany personal guarantees with the remaining companies?

2020hithard

The personal guarantees are from company loans from a insolvent and liquidated company. We have 2 other companies which are not trading. 

jonesMUFCforever

TripleH said:

jonesMUFCforever said:

Are the guarantees supported by security such as property?
If they supported by guarantee then bankruptcy won't save you from your debts.
If the guarantees are not  supported by anything - go for it because they are a useless piece of paper worth nothing!

Sorry, could you clarify please (brain is muddled). Why would bankruptcy not save them from their debts?
2020hithard, if yiu do go bankrupt, you would be unable to act as a company director. Do you havecany personal guarantees with the remaining companies?

If the debts are secured the lender would sell that to recover their money.
The OP has confirmed that there is no security so the guarantees are worthless.

Minkym00

The OR will enquire about why you made the personal guarantees and whether or not your  borrowing was reasonable (i.e. if your company was already insolvent there could be an argument that it could never be paid back). But ultimately it’s the lender’s risk to lend you without any security, so you not paying it back was the risk they took! The interview is about your personal bankruptcy so, whilst there will be questions, it’s a fact gathering exercise and they are not investigating your conduct as a director. If the company failed and you did nothing unreasonable then you have absolute nothing to worry about.

if you have no funds to liquidate the other companies, just do nothing and they’ll eventually be struck off.

MinuteNoodles

2020hithard said:

They are all unsecured debts. We have no assets and never have. 

Assets include personal pensions, equity in your home and cars over £1000 in value which aren't on finance secured on the vehicle such as a PCP. Do you have any of those?