Help - I've been served and i'm not sure what to do!

[paulnarruc]

Hi,

I'm in a right pickle at the moment. Basically I was a director of a business which though no fault of our own we have had to put into vol. liquidation.

The creditor meeting is soon and we intend to buy the company assets and move forward trying to save the other 19 jobs and repay the two directors personally guarenteed bank debture for the business. It's been a nightmare we have had to lose good staff which rips us both apart

One of the creditors we owed money to had a personal guarantee to myself and business partner. The debt was approx £20k and we made an agreement to pay on a 5 grand basis four times. We paid the first payment with every intention of paying the rest. Unfortunately the business failed before Christmas and i'm already having to take an overdraft as we haven’t been paid. Today we had a knock at the door and we were served a form. ( i'm not sure what form it is but it said we must return it in 18 days) the guy who handed it to us said you must get it back before the 18 days or I will be made personal bankrupt. He was very nice and said "look get a EX140 and send a copy to the solicitor as it would make the offer we proposal better", i'm really not too sure what he meant but he was very insistent.

The day early I rang the creditor and explained what was happening with the company and that I would ring her next week after the creditors meeting and she was thankful of my call and she said she wanted to see an amicable repayment but she needed to be repaid which i agreed. We left the call on good terms with her wishing us the very best of luck in the difficult times.

We have signed>

A form the open the account with a legal agreement several years ago

A agreement when we sorted the four payments that we would send the cheque thier soictor made us sign

I want to pay it and will but I need some time, getting 16k when your not even paid it impossible. What can we do?

Many Thanks!

[tomo28]

Hi I have been in the same boat as you I knew I had a viable business to carry on with after liquidation but alas we had a silly supplier that served on me all i did was put a defence in straight away with any old dros such as account discrepancies and failure to give us credits for returns in the mean time after talking to the supplier and giving them the stalk choice of working with me or not getting anything they dropped the action.

Business is tougth at the moment but it is making us all more efficient and stronger for the future if we are allowed to trade on.

best of luck

[enamae]

It sounds as if you've been served with a Statutory Demand. The 18 days is how long you have to apply to have this set aside.

I'm afraid I don't know much about the process but I've added a link so you can see what forms you need to complete.

 

Here

 

enamae

[macie]

This might be useful

 

http://www.bdl.org.uk/images/bdl14_ew_Dealing%20with%20a%20statutory%20demand.pdf

 

Not all personal guarantees are enforceable. A personal guarantee is a contract and has to have a "consideration" element

 

Consideration under English law - Wikipedia, the free encyclopedia

 

Sounds like the personal guarantee came late in the relationship when you already owed them the money.

 

This maybe "past consideration". The following os from Wikipedia. "A promise cannot be based upon consideration that was provided before the promise was made. For example, if X promises to reward Y for an act that Y had already performed, the performance of that act, while good consideration for the promise to be rewarded for it, is past consideration and therefore not good consideration.

In Eastwood v Kenyon, the guardian of a young girl raised a loan to educate the girl and to improve her marriage prospects. After her marriage, her husband promised to pay off the loan. It was held that the guardian could not enforce the promise as taking out the loan to raise and educate the girl was past consideration, because it was completed before the husband promised to repay it."

 

See a solicitor pronto.