Huge personal guarantee on business loan but home owner…HELP

Havingawobble

Please be kind, I’m not sure my mental health can take much more at the moment.

My husband and I owned a company and borrowed £193000 last year (currently £172000 remaining). I am a personal guarantor on the loan and the company has just been dissolved due to mounting debts and low sales.

Seeing that amount of money is terrifying and something I don’t ever think I will be able to pay off so I considered BR BUT I am a home owner with around £50,000 beneficial interest so I have no doubts the official receiver would use the house to recover some of the debts.

My husband will also come out of this with a level of debt against his name (around £60,000) so we need to factor that in also.

We have 3 young children so would be given priority on social housing and could move in with parents while ‘homeless’ so I suppose what I’m asking is is there ANY other options? Either options that don’t involved selling up or an option that means selling up but not declaring bankruptcy? Would an IVA potentially be accepted for the equity of the house? 

Essentially with no jobs currently we are not sure if we will even be able to afford to stay in the house and are therefore looking at options that won’t leave us in situation after situation with debt for years to come. Rather tackle it head on now and hopefully start to see life improve (at least with getting rid of the ‘unknown’) as soon as possible.

I am yet to do a SOA as without employment it’s hard to determine much apart from being able to say we can’t afford much but this may change as soon as we find employment.

Thanks in advance, safe to say I’m terrified! 

gwynlas

Can we take a step back and look at how you managed to borrow nearly £200k last year if the business is no longer viable?
How was this sum suppossd to be repaid if you did not have the assets to cover it?
Have you either/both got skills that could lead to well paying jobs in the near future/.

Grumpelstiltskin

Have you spoken to Business Debt Line?

Business debt advice | Free debt help | Business Debtline | Business Debtline

Forget IVA if you have no income, how would you pay it?

Havingawobble

gwynlas said:

Can we take a step back and look at how you managed to borrow nearly £200k last year if the business is no longer viable?
How was this sum suppossd to be repaid if you did not have the assets to cover it?
Have you either/both got skills that could lead to well paying jobs in the near future/.

The business was doing ok, but due to high costs we had got ourselves into a little trouble. Came up with a plan (including a new machine purchased separately to bring costs of manufacturing down)
Looking back now it all feels really stupid but we were sure we could turn things around and everything would fall into place and after submitting all accounts the loan company was more than happy to offer. That didn’t happen and we have had to make the decisions before getting into further debt.

My husband has many skills so has to potential to go into a well paid job, I will need to think around childcare.  

Havingawobble

Grumpelstiltskin said:

Have you spoken to Business Debt Line?


Forget IVA if you have no income, how would you pay it?

The loan hasn’t actually been handed to us yet as we are just starting insolvency proceedings which will take weeks so I’m trying to look ahead and at the fact it won’t hopefully be long until we have jobs and may be able to escape bankruptcy at least

Havingawobble

And no I haven’t been able to speak to any debt helplines as we crunched all numbers on 23rd December and unfortunately knew what we needed to do however all helplines are closed until next week 

molerat

Havingawobble said: 

 .........Came up with a plan (including a new machine purchased separately to bring costs of manufacturing down)

Where is that machine now ?  Does it have a value ?  What other assets does the company have that could be realised ?

Havingawobble said:

The loan hasn’t actually been handed to us yet as we are just starting insolvency proceedings which will take weeks so I’m trying to look ahead and at the fact it won’t hopefully be long until we have jobs and may be able to escape bankruptcy at least

What precisely does that mean ?

TheAble

molerat said:

Havingawobble said:

The loan hasn’t actually been handed to us yet as we are just starting insolvency proceedings which will take weeks so I’m trying to look ahead and at the fact it won’t hopefully be long until we have jobs and may be able to escape bankruptcy at least

What precisely does that mean ?

I'd imagine that the lender hasn't yet invoked the personal guarantee?

Havingawobble

TheAble said:

molerat said:

Havingawobble said:

The loan hasn’t actually been handed to us yet as we are just starting insolvency proceedings which will take weeks so I’m trying to look ahead and at the fact it won’t hopefully be long until we have jobs and may be able to escape bankruptcy at least

What precisely does that mean ?

I'd imagine that the lender hasn't yet invoked the personal guarantee

Yes exactly this, only once the company is fully closed will this loan come to me. 

The machine is under its own asset finance and that will be covered by the sale of the machine itself so isn’t a worry. The loan was unsecured and therefore liability will soon be with me

Havingawobble

There is also a small amount of smaller machines and stock that altogether may raise around 20,000/30,000

TheAble

Can you explain a bit more about your husband's £60k? Is that debt that he took out in his own name but put into the business? Is it of the unsecured type e.g. credit cards etc?