Confusion over company debt with personal guarantee

auzzymoose

Hi there,

I'm wondering if anyone can clarify whether a debt can be owed both by a limited company and by an individual simultaneously. I ask this because I took out a loan under my limited company several years ago which had a personal guarantee. The business ran into trouble and was unable to keep up the contractual payments. The debt then got sold on and now a collections agency is chasing up what's owed. 

Upon checking my personal credit file, I can see that this loan has been registered as a default to me personally by the original creditor. So has the personal guarantee been triggered already and now the debt is owed by myself? Or, can the company still owe the debt and the same debt can be registered as a default on my personal credit file?

The collection's agency have not been particularly clear with their documentation. Obviously I'll need to clarify this so I know whether it falls under consumer debt laws or whether my company still is responsible for the debt, which would be different. 

Thanks in advance for any help or advice. 

MattMattMattUK

auzzymoose said:

Hi there,

I'm wondering if anyone can clarify whether a debt can be owed both by a limited company and by an individual simultaneously. I ask this because I took out a loan under my limited company several years ago which had a personal guarantee. The business ran into trouble and was unable to keep up the contractual payments. The debt then got sold on and now a collections agency is chasing up what's owed. 

Upon checking my personal credit file, I can see that this loan has been registered as a default to me personally by the original creditor. So has the personal guarantee been triggered already and now the debt is owed by myself? Or, can the company still owe the debt and the same debt can be registered as a default on my personal credit file?

Depending on how the guarantee is written, both can be jointly liable if the company cannot/will not pay, the debt can transfer to the guarantor, but they would technically have the right to recover against the Ltd if there were assets etc. 

auzzymoose said:

The collection's agency have not been particularly clear with their documentation. Obviously I'll need to clarify this so I know whether it falls under consumer debt laws or whether my company still is responsible for the debt, which would be different. 

Thanks in advance for any help or advice. 

It is not covered by the Consumer Credit Act.

Is the business still trading, is it insolvent, has it been or is it in the process of being liquidated?

auzzymoose

MattMattMattUK said:

auzzymoose said:

Hi there,

I'm wondering if anyone can clarify whether a debt can be owed both by a limited company and by an individual simultaneously. I ask this because I took out a loan under my limited company several years ago which had a personal guarantee. The business ran into trouble and was unable to keep up the contractual payments. The debt then got sold on and now a collections agency is chasing up what's owed. 

Upon checking my personal credit file, I can see that this loan has been registered as a default to me personally by the original creditor. So has the personal guarantee been triggered already and now the debt is owed by myself? Or, can the company still owe the debt and the same debt can be registered as a default on my personal credit file?

Depending on how the guarantee is written, both can be jointly liable if the company cannot/will not pay, the debt can transfer to the guarantor, but they would technically have the right to recover against the Ltd if there were assets etc. 

auzzymoose said:

The collection's agency have not been particularly clear with their documentation. Obviously I'll need to clarify this so I know whether it falls under consumer debt laws or whether my company still is responsible for the debt, which would be different. 

Thanks in advance for any help or advice. 

It is not covered by the Consumer Credit Act.

Is the business still trading, is it insolvent, has it been or is it in the process of being liquidated?

Thanks for your reply. Right okay, I will need to look closer at the personal guarantee. 

Even if they try to collect from me personally it will not be covered under the CSA then? Because the loan was originally taken out by a ltd company?

The business is still trading and I'm gradually getting it into a healthier financial position. It is still quite heavily in debt and there's no valuable assets apart from stock. 

auzzymoose

Sorry, my question should have read CCA not CSA.

TheSpectator

No, it won't be covered under CCA.

Is the company technically insolvent?

ManyWays

This is technical and you need advice from experts so I suggest you talk to Business Debtline (https://www.businessdebtline.org/) who cover both business and personal debts.