I started a company in 2006 with another director, who resigned earlier this year.

The company stopped trading in March this year, I am unable to afford the liquidation process.

When we started trading we signed a personal guarantee for a 30k overdraft,

but later took out a loan to pay 23.5k of the overdraft off a

nd then later paid back 5k, leaving a 1.5k overdraft.

We are now left with around 8k left owing on the loan,

HSBC is demanding prepayment of the full amount of 9.5k,

made up of the 1.5k overdraft

and the balance of the loan,

saying we signed personal guarantees for this loan.

We did not sign any guarantee for this loan,

only when we first took out an overdraft,

but they say the guarantees apply to the loan as well.

We were not made aware of this and would not have taken out the loan if we had known.

A few years ago they did ask us to sign guarantees again which they sent to us,

but we never signed as we did not understand why they wanted them

and we never returned them.

I do not have the funds to pay this,

and I do not want to lose my house,

we were told at the time that it would never be used anyway,

obviously this was all to get us to sign it.

Does anyone know what my options are,

now the other director has resigned,

this leaves me liable for the whole balance.

now the other director has resigned, this leaves me liable for the whole balance.

Are you sure that's right? If you give a personal guarantee I wouldn't have thought you can get out of it simply by resigning as a director. You'd need to look at the exact wording of the guarantee you both signed but I'd have thought it more likely you are both still guarantors.

I think this is probably something you need some proper legal advice on.

The exact terms of the guarantee as well as its construction (deed or contract) and signing would need to be reviewed to give you proper advice.

Furthermore (although I'm not 100% sure) I don't think simply resigning as a director would necessarily relieve the other director of his obligations under the guarantee - I would have thought this would only be possible with the consent of all other parties to the agreement (i.e. you and HSBC).

We were not given copies of the guarantee, and we were never given one when we asked. So I have nothing to refer to.

I only assumed the resigned director was not liable as he signed over his shares and is nothing to do with the company or the bank account anymore.

I am not trying to get out of paying this and I would take on the loan payments to pay it off, but I am not sure if or how I do this or even if they would exept it, but I am annoyed that we were not told about the guarantee when we took out the loan.

I think firstly you need to chase them again for a copy of the guarantee. Until you see a copy there's no way to tell what they can and can't rightly pursue you for and whether they are right to pursue just you or the other director as well.

Am I correct to assume the loan of £23.5k was in the company's name? (If you are guaranteeing all liabilities owed to HSBC by the company, it could explain why they are including it with the overdraft).

Hi, yes the loan was in the companies name. I don't think they can find the original guarantees, thats why they asked us to sign new ones, which we did not do.

Yes, simply write back to them asking for a copy of the guarantee and stating that you are unable to make any payment until this is provided.

Should I do this before I offer to pay the loan repayments.