Thread: Personal Guarantee for Business Overdraft unsecrued

This is my first post on this forum, so hope it's in the right place. Please help if you can.

My Business, a limited company is now in involuntary liquidation since November 08. I am now on Job seekers allowance and also in personal debt with credit cards/car loan.

On 9/01/09 Natwest have written to me demanding payment of £39,117.24 stating that this is my liability plus interest will continue on the debt.

I signed a personal guarantee with the bank on 22/05/2002 to increase the overdraft at the time from £20k to £35k (plus a £5k charge card) so the total guarantee amount was for £40k.

The whole amount was on an unsecured basis. My copy of the agreement which was not signed by the bank or myself says it is a "Limited guarantee by individual of a third parties obligations Secs 27 (7/95)

They also made me sign a "Wavier of legal advice - Fully involved director", again I have an unsigned copy.

The whole lot was signed in a "Little Chef" car park in the Bank representatives car. (I believe the representative no longer works for the bank).

I am worried that the bank will make a charging order on my house or make me bankrupt or both!

Can anyone please offer any advice? (my approximate total debts including this one are around £70k)

I have sent the bank a letter asking for them to hold fire until I've had a chance to assess my financial situation and complete I/E budget to make offer of pro rata instalments to creditors.

Have also sent same sort of letter to credit card companies.

Day later sent CCA requests to credit card companies and Car loan company.

Will send SAR in a few days time.

I have a couple of other threads started for the credit cards but believe the Halifax have sent me an invalid DN due to wrong dates not giving me enough time.

I have MBNA/Restons letter and looking at other threads have a battle ahead.

Lloyds TSB will start soon I think.

All three cards I have been paying token £1 month payments

Car loan is up to date so far (wife paying) but CCA'd them anyway to see what they come up with.

My main worry is Natwest and the £39k as I believe this falls outside the Consumer credit act and haven't a clue where I stand with it or if there is something I can barter with.

Any help or advice gratefully received. Quite happy to make donation to site out of money saved. From what I can see there is a lot of good advice on here and saved lots of people like me a lot of sleepless nights. I already feel stronger and more confident reading a lot of the threads over the past few days.

If it was not signed and is unsecured you might be OK. Are you sure you haven't just kept the unsigned copy and sent one back to them? I would think they wouldn't agree to the O/D if they hadn't got something back.

As the debt is now personal I think you have the same rights as a consumer and not a business.

I would ask them to provide you with a copy of the guarantee, using a SAR if necessary.

How much equity do you have in the house? Taking into account a reduction of 15-20% for 'forced sale value'.

Originally Posted by Goldlady

If it was not signed and is unsecured you might be OK. Are you sure you haven't just kept the unsigned copy and sent one back to them? I would think they wouldn't agree to the O/D if they hadn't got something back.

As the debt is now personal I think you have the same rights as a consumer and not a business.

I would ask them to provide you with a copy of the guarantee, using a SAR if necessary.

Hi Goldlady, thanks for replying.

I did sign the Banks copy, and the waiver of legal advice copy. but they did not sign my copy, but I don't think that would matter. If they still have the original I don't think I can argue that one.

As the contract is not under the consumer credit act and is for £40,000 I don't know what law it falls under. The title of the document says "Limited Guarantee by Individual of a Third Party's Obligations Secs 27 (7/95)"

I have tried to search for this but have not been able so far to find any reference to it as any sort of act. (still looking)

It was all a difficult time for me (very long story) and the Bank knew that If I did not sign, they could effectively put me out of business. I don't believe now that I fully understood what I was signing and it was all very quick.

The bank's rep phoned me up and asked me to meet her half way to sign the documents and was the car park behind the Little Chef OK? I turned up and in her car I saw the documents for the first time and signed the documents in a hurry as the Banks rep had to get back (supposedly she was in a hurry to go somewhere which is why she met me half way) It was all over in less than 10 minutes. I queried the Waiver of Legal Advice form, but the rep said I had to sign it if I wanted the facility the bank agreed to.

At the time, I had taken over the company only a year previous due to the company having no directors due to a fatal accident. I took on the directorship to save my own employment and that of my colleagues at the time. Looking back I was very naive, and trusted the Banks were there to help (I of course know different now)

To answer your other post, Yes, the banks knew very well that I had the equity in my home to cover the guarantee. I refused previously to allow them to use this as security (my wife would't let me!). I already had an unsecured £20K OD and was only asking for an extra £15K. The type of business I was in would usually need at least this if not £50+ to cover usual cashflow needs.

My only weak defence as I see it is that I was under duress but I think it would not succeed at court as it is all hearsay my word against theirs and they have the unlimited legal pot, and I am currently on benefits. (If only I could find a legal precedent similar to my own)

My last hope is that they have mislaid or lost the original document, but knowing my luck they will have it.

My main concern is my home. It it the one I wanted to grow old in and has been in the family since 1967. I fear that they will not accept the token payments I can make at the moment in my current situation and with interest being added I would be paying it off until I die or longer. Coupled with my other credit card debts makes it an impossible situation for me and reckon they will go for judgement and charging order although as yet they have not started anything other than the demand for payment.

Any way, to remain positive, I am going to see if I can get rid of some of the others by way proving they can not enforce the debts like so many others on this wonderful group, and will enjoy getting back to them and affording myself some satisfaction against the institutions that hound us and kick us when we are down and seem to enjoy it. I have decided no longer to sit still while being punched by the system and now fighting back.


(bit long but thanks for reading, it's good to get it off my chest and a great relief to be able to talk about it)

Needabreak? (I certainly do)

OK, so the next question is how much of the overdraft is charges? And also they should not be continuing to add interest etc as the company has gone bust.

Well, the company was pretty much at the ceiling level of borrowing for over 6 years, then when things went quiet we had cash flow problems with our creditors and no facilities left. I guess there will be charges on the overdraft but how will I...

1. Get the information and be able to work them out accurately
2. Get these knocked off the outstanding amount or challenge them
3. Stop them charging more interest (If I can)

Do they have to stop interest when the company's gone bust, or will they look at it as now transferred to me as a personal debt and nothing to do with the company?

I have had no communication whatsoever from the official receiver since December when my interview took place after the company went bust in November.

Is there anybody on here with Natwest business contract experience or experience of personal guarantees with banks. I could attach the original contract for them to look at and see if there are any loopholes.

Thanks again for your support.

I am going to ask for your thread to be moved to the Business Account Forum as there will be more help available to you there.

I argued once that once a business loan (this was HP) fell under the personal guarantee it then became governed by the Consumer Credit Act and that as we had paid more than 3/4 of the loan and they had repossessed the van we did not owe them any money. Whether I was right or wrong I still don't know but we didn't hear from them again.

Thanks Goldlady

I do need help on this one as I can see it going nasty in a few months and need to prepare myself with as much info on the subject to fight best I can.

Needabreak.

Thread moved here

Thanks Martin. Just bumping this thread up to see if anyone on the business forums can help needabreak - as he/she clearly needs a break

Originally Posted by Goldlady

Thanks Martin. Just bumping this thread up to see if anyone on the business forums can help needabreak - as he/she clearly needs a break

Goldlady HE thanks you for bumping.

Only really started scrutinising my own contract after reading thousands of posts and realising every case is slightly different. I was going to look at the relevant legislation but upon a search nothing came up under the heading of my contract until the search engine suggested other wording.

Love this group, love the people in it

NAB

Here is the actual contract. Any legally minded, please have a look, particularly at the wording at the top, which is wrong. There is no such "Secs 27 (7/95)" could this change the legality, for example what if it was a CCa contract but worded wrongly say 1874 instead of 1974, not much difference but it is wrong.

All signed in bank reps car in a little chef car park, after a phone call saying that the bank rep was busy and could we meet & do this half way today.

Page 1
Page 2
Page 3
Page 4
Wavier

Anything to strengthen my case appreciated, but where to look would be handy such as precedents for wrongly worded contracts, contracts signed under duress, and the Acts to look under to check these sections out.

Thanks.
Needabreak

Bump.

Bumping your thread for the morning shift!

To Needabreak,

How are you getting on with your debt issue?
Your predicament is very similar to my Dad's !
His company went bankrupt in April and he now owes Nat West circa 60k because they made him agree to personally guaratee an overdraft they now want back when he was trading.
He wants to know if he can make an offer to pay it back in installments instead of them seizing his house or making him pay it all back in one go ? Can anyone advise on this ??
Mark

Just found this!
Hope you are resolved. I have a VERY similar problem - except my wasnt in the little chef, but leaning against the photocopier and probably took 15 minutes as we had a cup of tee.
Have posted a new thread as at todays date. If see this and are able to trouble to read it, should you have a info. that may help me I would love to hear from you

I have a similar problem with my Bank who claim the business debt was personally guaranteed by me and is secured on our house - but the standard security says it only applies to joint debts - not my own individual debt. They can't find the original business loan paperwork by the way.

I can't repay the high monthly amounts demanded and they are threatening legal action as I hav edefaulted on the agreement. I am at a loss as to what to do - as I was relying on about £10k of unfair charges and interest refund to make a big dent in this business debt - but this now won't come quickly if at all!

Any advice anyone?

I feel for you.
You have a bit in your favour I suppose in that they cannot provide the documentation.
All the bank are able to do in my case is provide a copy of the guarantee.
They have not been able to provide copies of any other correspondence(I am 99.9% certain there wasnt any) nor time lines on when guarantee was submitted for signing and when it was returned.
What happened to me was essentially duress regarding the signing and the events many years later which concluded with their calling in the guarantee was effectively neglicence on their part
I never signed a waiver.
The duress, no waiver or offer of one, and their negligence will be the basis of my defence as even though they have not not come up with promised info they have still let loose a DCA on me.

If you look at the documentation listed on needabreak you will see a waiver. If you signed one of those you really do have a problem UNLESS the bankman was standing over you saying sign this or else when I think you have a chance. The timeline is important. If Bankman sees you, presents the paperwork for you to sign and says"if you dont sign now, we will be returning cheques" I reckon that is duress - but I am not a lawyer
If at the same time they said you had to sign a waiver but did not give you time to consult someone who would be on your side, I am sure that would help a duress claim too.
But the ruling on bank charges does not give much encouragement for us to rely on the law being "fair" that ruling being very clearly unfair

I do wish you luck-I will be keeping the forum in touch with my results as and when they happen

Hi i hope you can help

this is my first post i took out a business loan with HSBC in 2004 for £58K to purchase a company secured against a property i owned i have never missed a payment i sold the property in 2006 and put the profit form the sale in to an account with the loan secured against it, in 2008 the business folded and i used the £25K from the sale of the property to pay off some of the loan i have carried on paying the loan but i am now in the position where i cant afford the repayments anymore, to date i have paid the bank over 65K but there is still about 20K left on the loan all of which is intrest.
does anyone know if there is a way out of this

can anyone help????????