Guarantee Advice

[Martyn68]

Hi. I hope people can help me. I found this site today, and it's given me a bit of hope in an otherwise bleak situation.

 

For several years I worked for myself (although as a Limited Company). Two and a half years ago I had to close the business down after my father (Co Sec) died and I seperated from my ex-wife. The business had an overdraft, of approximately £3k, which I had personally guaranteed (up to a maximum of £5k).

 

Over the years that the business was running, which never survived before it's infancy stage before folding, I regularly received charges on the business for exceeding overdraft limits and occasionally for unpaid items.

 

At the time, I did verbally inform the bank that the business was no longer trading, but I was not able to formally liquidate the business as I was not able to afford this.

 

Even though the business was "struck off" at Companies House, Lloyds TSB have continued to apply charges every month for exceeding the overdraft limit, which have taken the balance of the account up to £3.8k

 

With all the pressure on me, I foolishly buried my head in the sand hoping it would go away as I was also suffering other financial difficulties.

 

Last month I received a letter from Westcot Credit Services in connection with this outstanding sum. I phoned them up and offered £15 per month as it is all I can afford (I have similar arrangements with all my creditors). I was advised to send in a financial statement which I duly did.

 

I received a call a week later from Westcot. I told them that I had sent in the financial statement, but they said that they had not yet received it and would call me the following week once it had arrived.

 

I heard nothing, so was expecting a letter to come through confirming acceptance of the arrangement.

 

Today I received a letter from Nelson Guest & Partners Solicitors saying:

RE: Lloyds TSB Bank Plc

 

DEBT: £3,801.05

 

We are instructed by Westcot Credit Services Ltd on behalf of the above named client, in connection with the sum outstanding shown above.

 

Unless paymentis made to Westcot Credit Services within 7 days of the date of this letter, legal proceedings for the recovery thereof may be commenced without further notice.

 

In the event of Judgement being obtained, we shall seek all fixed costs and fees together with statutory interest on the outstanding balance.

 

Yours faithfully,

S A Nelson

 

My questions, if anyone is able to help me, are as follows:

As I was guarantor for the business, am I able to

pursue a refund of charges in the same way that I could if it was a personal account?

If so, should I direct any correspondence to Lloyds TSB, Westcot Credit Services or Nelson Guest & Partners?

How should I challenge any part of this (ie. what course of action would people recommend)?

 

Any help or suggestions would be very gratefully received.

[elsinore]

Hello Martyn, welcome to the LTSB forum.

 

Sorry to learn of your predicament, but there should be a solution to your problem and you’ll probably find the answers here. I too had a business which was badly affected by LTSB’s antics. I also had a limited liability company, but that was some years ago and my memory, of matters such as these, is pretty rusty.

 

Wescot Credit are yet another crummy Debt Collection Agency who might well have bought the debt off LTSB for a song. That doesn’t stop them from claiming the full amount though!! They have introduced the solicitors as a frightener in the hope that you will cough up the total sum.

 

Can you explain what you mean by ‘struck off’? Was a winding up order obtained by someone or did you simply inform Companies House that the business had ceased trading? This is potentially important because the bank account would have been in the name of the company and so I suppose that any claim on the bank will have to come from the company. Therefore the current status of the company could have a bearing on how you go forward. On the other hand the bank is calling in your personal guarantee which would suppose that you could personally challenge any claim.

 

The good news is that an unlawful charge is an unlawful charge whether it’s applied to a personal account or a business account.

 

Do you have all (or some) of your bank statements? Can you estimate the total value of unlawful charges? If not, you will have to ask LTSB for the information which will be time-consuming and possibly expensive. If you send a Data Protection Act letter for account details LTSB might knock it back on the grounds that it only applies to individuals and not limited companies. I suppose that you could counter this on the basis that, as a director of the company, you are an individual. But they might just send the info anyway.

 

One way to buy yourself time is to inform the solicitors and Wescot that the account balance is in dispute and that they should refrain from any action at least until the matter is resolved. If it gets heavy I think you can apply for an injunction to prevent any further action while the account remains in dispute. You should also ask Wescot for all info that they have including a copy of the deed of assignment from LTSB. This will prove whether the debt was properly assigned or merely sold off cheap.

 

I hope some of this is useful and encouraging, but someone better versed than I will come along and correct me if I’m wrong and also make other suggestions.

 

Remember these are my opinions and ultimately you must decide on your own course of action.

 

Elsinore

[callumsgran]

Hi Martyn, Elsinore has given you some excellent advice, try what she says and if you have any difficulties come back to us, good luck

[Martyn68]

Hi Elsinore,

 

Many thanks for your help. By "Struck off", I mean that Companies House were simply advised that the business had ceased trading.

 

 

I don't have all the Bank Statements, so I am sending Lloyds TSB a letter asking them to verify how the balance has been reached, which I believe they should inform me of seeing that they are pursuing me for the debt as guarantor.

 

I have drawn up the DPA letter to Lloyds TSB, but amending the 1st paragraph to read:

Please supply me with a complete list of transactions and charges relating to the above account that you are pursuing me for payment on, as guarantor. Alternatively, a complete set of statements for that period will be acceptable. I am sure that you will appreciate that I would like to understand how the balance that you are pursuing has arisen.

 

To Westcot & Nelson Guest I am sending the following:

I have recently been advised that I am liable for a facility that I guaranteed a few years back.

 

As you will appreciate, this has come as a shock to me. I am currently in dispute with Lloyds TSB, and I have requested a complete list of transactions and charges relating to the account, illustrating how the balance of the debt has arisen.

 

As soon as I receive this information, I shall be in contact with you.

 

In the meantime, should you have any questions relating to this matter, please do not hesitate to contact me

 

Yours faithfully

 

These letters will be going out on Monday. If anyone thinks I should make any amendments please let me know, otherwise I will keep you informed of developments.

[reload]

Make sure you send them recorded! Then, if they try the old 'Oh, we didn't get it" line you've got evidence.

 

Other than that, looks good.

[Bean]

If you have not already read them, read the following threads by:

 

Empire Strikes Back:

http://www.consumeractiongroup.co.uk/forum/lloyds-bank/9125-large-claim-any-views.html?highlight=Empire+Strikes+Back

 

tedblue:

http://www.consumeractiongroup.co.uk/forum/royal-bank-scotland-bank/1805-rbs.html

 

These boys are both inspiring, have large claims for business accounts, and it's probably fair to say they've both been through a world of pain which is now being progressively relieved by this site.

 

Don't panic, think smart, you can ride this out and come out of it smiling.

 

I hope you expediently recover what the law says you are entitled to.