Personal guarantee - company in liquidation

[snork-maiden]

Hi. This is my first post on this forum. Hello.

 

I was one of four directors for a small limited company which, due to the collapse of property market, we had to put into liquidation a couple of months ago. We were doing really well for 4 years, selling marketing products for a diverse range of businesses, but most of our larger contracts were with the high-end property businesses. The drop in this market and the loss of some pretty important contracts really hit us during our final year of trading and the banks were unwilling to help us ride it out (or assist us with our plans to diversify into other markets).

 

The business had two company vehicles on finance (purchased in March/April 2007) and I was personal guarantor on both agreements The vehicles were taken back some time ago and as I didnt hear anything, I assumed the value had cleared the outstanding finance.

 

However, I received a letter on Saturday 22nd Nov (dated Thursday 20th), requesting payment of £7640 by Thursday 27th Nov. The letter states that failure to pay by Thursday will result in legal action being filed without any prior warning. This amount is just for one of the agreements - I am yet to hear about the second.

 

Enclosed were copy invoices and a statement but nothing had been enclosed regarding the agreement itself.

 

I have replied, asking for copies of agreements (which I did request when I was contacted about the vehicles being collected) and subject access.

 

I am a little worried. The closure of the business resulted in loss of income for not only myself but also my partner who worked with us full time. We are both currently working freelance to make ends meet whilst looking for full time employment. So, obviously as spare £7k is not knocking around! Also, I will probably be getting a letter any day for the other agreement and a similar amount.

 

I would be grateful for any advice, as I know very little about my rights. Firstly, the timescale thay have given me seems unfair. Is this right? Are they able to issue court proceedings on Thursday? Do they have to offer me any terms to repay or can they take me to court as I am unable to pay the balance in full? Also, how would I go about striking terms for repayment when our household income is not consistent?

 

With regards to assets, all I own in my name is my car (worth about £1k) and my house is 50/50 with my partner (there is no equity in the property - we are on interest only 95% mortgage and so there is unlikely to be any equity). Where do we stand with regards smaller belongings in the home - i.e. TV, furniture, etc? Do they have any authority to seize goods?

 

Thank you for any help you can give me.

[jobymartin]

hi

dont worry because this is not a secured loan so your house etc

no problem i had a ltd company and was a guarantor on a loan and

i pay them a little every month the most they can do is take you to

court which very much doubt and then you can say what you can afford

to pay .

thanks

[Guest dvdriley]

send them a letter explaining youyr cicumstances and offer only what you can easliy afford.

[version302003]

Hi. This is my first post on this forum. Hello.

 

I was one of four directors for a small limited company which, due to the collapse of property market, we had to put into liquidation a couple of months ago. We were doing really well for 4 years, selling marketing products for a diverse range of businesses, but most of our larger contracts were with the high-end property businesses. The drop in this market and the loss of some pretty important contracts really hit us during our final year of trading and the banks were unwilling to help us ride it out (or assist us with our plans to diversify into other markets).

 

The business had two company vehicles on finance (purchased in March/April 2007) and I was personal guarantor on both agreements The vehicles were taken back some time ago and as I didnt hear anything, I assumed the value had cleared the outstanding finance.

 

However, I received a letter on Saturday 22nd Nov (dated Thursday 20th), requesting payment of £7640 by Thursday 27th Nov. The letter states that failure to pay by Thursday will result in legal action being filed without any prior warning. This amount is just for one of the agreements - I am yet to hear about the second.

 

Enclosed were copy invoices and a statement but nothing had been enclosed regarding the agreement itself.

 

I have replied, asking for copies of agreements (which I did request when I was contacted about the vehicles being collected) and subject access.

 

I am a little worried. The closure of the business resulted in loss of income for not only myself but also my partner who worked with us full time. We are both currently working freelance to make ends meet whilst looking for full time employment. So, obviously as spare £7k is not knocking around! Also, I will probably be getting a letter any day for the other agreement and a similar amount.

 

I would be grateful for any advice, as I know very little about my rights. Firstly, the timescale thay have given me seems unfair. Is this right? Are they able to issue court proceedings on Thursday? Do they have to offer me any terms to repay or can they take me to court as I am unable to pay the balance in full? Also, how would I go about striking terms for repayment when our household income is not consistent?

 

With regards to assets, all I own in my name is my car (worth about £1k) and my house is 50/50 with my partner (there is no equity in the property - we are on interest only 95% mortgage and so there is unlikely to be any equity). Where do we stand with regards smaller belongings in the home - i.e. TV, furniture, etc? Do they have any authority to seize goods?

 

Thank you for any help you can give me.

 

Before anyone can seize goods they need a court order, and that is along way away.

 

Even if then get a ccj against you, you can sort payments out with the court. It is hard I know but dont be bullied by these people, get informed (from reading the forums) and post exactly what you need answers to clearly (without peronal info) and keep it to one thread(this one).

 

There is a forum specifically about vehicles, so you could asked for this to be moved there. http://www.consumeractiongroup.co.uk/forum/vehicle-retailers-manufacturers/

 

Its along time since I read about the return of a vehicle but:

 

You need to find out:

How did the company come to the figure that they say you owe.

 

If they auction/sold they vehichle on then did they get the price which it was worth.

 

Was it hire purchase or something else?

Edited November 24, 2008 by version302003

[snork-maiden]

Thanks for the advice.

 

There have been some developments on this since posting.

 

I requested a copy of the agreement I had signed. The copy they sent had been signed by me, but on behalf of the company as a Director. I had also asked for Subject Access.

 

The finance company chased my again before Christmas and enclosed a copy of the same document with that letter.

 

I have received the SAR information today. There are two copies of the same document, both dated 12th April 2007; on one copy I have signed on behalf of the company and on the other I have signed as an Individual Guarantor and it is witnessed (the "Company Guarantor" page of this agreement is missing). The latter is a copy of a faxed document which I dont remember signing (although the fax number at the top is our old office fax number and the witness was a colleague who was office-based). Both agreements are dated 12th April 2007 and the date on the fax header on the latter copy is 27th April 2007. There are no dates against signatures and a page is missing from one of the documents.

 

Do I have grounds to appeal this? If so what should my next step be?

 

Happy New Year!

[Scooby_Doo2]

Bump!

[snork-maiden]

I have been communicating with the finance company.

 

I received a letter on 12th February (dated 10th February) enclosing a copy of the agreement I signed as personal guarantor and requesting a payment proposal by return.

 

I posted my reply yesterday.

 

Today, I have received a County Court Claim which was issued on 13th February (meaning it must have been filed on 12th February?). So they gave me very little/no time to respond and prevent legal action. Up to this point, I have always been extremely responsive and kept communications open - I have had to wait weeks for some of their correspondence.

 

I feel that they have acted unfairly in issuing the action without allowing me an opportunity to respond to their letter and prevent incurring the extra court costs (£360).

 

I had a couple of outstanding queries regarding my liability... these were raised in my letter sent yesterday:

 

They have two copies of the Guarantee document; one where I have signed as Director on behalf of the company and the other where I have signed as personal guarantor and it is witnessed. Why are there two copies?

 

The copy where I have signed as personal guarantor was witnessed by a co-Director. However, that particular Director was not there on the day that the cars were picked up (12th April) so he could not have signed the paperwork on the day the agreements were signed. The fax header is dated 27th April (some time after) so can this be classed as being part of the same contract?

 

I also requested proof of the amount they say they got at auction for the vehicles - all I have seen is a statement of account - and I queried the value that got (2007 Reg Civic Type-S 2.2 CDTi 3 dr = £8600?). The milegae was quite high but after 18 months I dont believe they would have lost £10k in value? I asked them to justify the price.

 

I also offered £5 per month. I currently have no regular income (the liquidation of the company resulted in my redundancy and I have not found another job). I have no savings/investments and am in overdraft. I am reliant upon my partner's self employed income to cover all bills, etc.

 

The paperwork has been filed at a court across the country from where I live and so I dont even know how I would be able to attend.

 

I have been advised by a solicitor that I should consider an IVA.

[Guest dvdriley]

The paperwork has been filed at a court across the country from where I live and so I dont even know how I would be able to attend.

 

apply to the courts by writing and telephone to have the case transfered to your local court. They wont refuse you.

 

Return the acknowledgement of claim saying you are defending the claim, you will then have 28 days to submit your defence.

 

In respct of the defence you will need to get help from others on here.

[Swampmonkey]

hi

dont worry because this is not a secured loan so your house etc

no problem i had a ltd company and was a guarantor on a loan and

i pay them a little every month the most they can do is take you to

court which very much doubt and then you can say what you can afford

to pay .

thanks

 

This is interesting and reassuring. My business partner and I signed unsecured PGs to cover an overdraft and also a loan. The business is now struggling to survive and we certainly have no assets to repay either. Is it the situation that they could force a sale of our houses but never do, or are the courts required to ensure that, providing we are paying what we can afford, then our houses are safe?

[scarydays]

I'm in a similar position - PG on a loan for a company that has now failed. As well as getting a judgement against me, they have placed a charging order on my home. Very messy, Trying to see what i can do about it now.

[charlie*]

You say above that you have an overdraft with your personal guarantee on it.

 

My younger son is in just this situation, right now. Not long out of uni with a decent BSc he took a personal business loan to help finance a Ltd Co which, thru no fault of his own has been forced to cease trading thru lack of orders... despite paying £1400 monthly for adverts in Yell, Thompsons etc...

 

He is going to the bank next week to ask for their help.... £5 a month for the next 6 months to a year and a freeze on interest for this period will be acceptable to them.... for it is in their best interests to so do and he has proved to be as good as his word.

 

Hope this helps..... I also suggest you take some time and read a very good e'book written by Mary Croft. She's a good guy from Canada. If you go here then download to your own machine... IT IS IN PDF and is FREE

 

http://www.hackcanada.com/canadian/freedom/mary_croft.pdf

 

(you may have to copy 'n paste this url)

 

It may not solve all your problems, but it will give you heart and strength... and you will know more about money, what it is, where it comes from and where the real power lies than most any bank manager, local or regional in the whole of the 5 English speaking countries that make up the old empire.

 

Canada? - well, 4 other countries use our laws, America, Canada, NZ and Australia - all franchised to the Inns of Court in the City of London (the sq mile which still controls most of the world for that is where you will find

N M Rothschild Ltd, bankers - said to be worth over £500 trillion).

 

There are a lot of people in this forum who can help you, some are professional, many are self taught and know more about the CCAct than many lawyers - most lawyers (like accountants, judges and politicians) work for the system, CAG works for the people.

Edited January 29, 2010 by charlie*

[munden123]

I seem to be in a similar situation to this,

where i TOO was fresh out of university,

where i set u p a LTD company, and took out a loan (WITH A DG).

 

 

Six months later, i was admitted to hospital where i was for Five months, and in this time, the company strugglled to trade obviosly as i was the sole employee, and we suffered lack of orders.

 

 

I was wondering CHARLIE if your son had any luck with his proposal to HSBC?

 

Or if anyone else has any advice

[Rizzy]

Hi guys/girls, I am in a similar situation too. Just got a call out of the blue at work todayfrom a debt company that bought an old debt that was from a company that was liquidated 4 and a half years ago. I was young and stupid (23 yrs) and according to the debt collector I signed a guarantor agreement. I was the M.director at the time. I feel really confused and down as I did not know the consequences of my stupididty back then, and now I am finaly starting to get back to my feet again! I am not sure what to do. I asked the guy not to call me at work. I have given him my PAYG mobile number but I opted not to give him my mobile number? Anyone got any ideas how I should approach this....would really appreciate the help!