Business overdraft guarantee

[markyb1976]

I need some advice with an issue I am having with Lloyds TSB. I have an old business (ltd) that has/is closing down and it has a 5k overdraft with Lloyds. They have stated that I signed a g/tee and have provided me with a copy and are telling me that I must repay the debt or they will look at charging orders against my house.

A business manager from another bank mentioned to me that you should have been told to get legal advice before signing it or signed something else to waive this. I did neither and wanted to know what my rights are as I thought my property should be protected if the company is Ltd???

I'm not really in a position to pay this back to them either. So I guess the only way if I am liable is a repayment plan with them?

Any advice would be appreciated.

[comebackjimmy]

Hi

 

I am by no means an expert, especially when it comes to banking law so wait until some other CAGers come on here.

 

However, I would think that if you signed an overdraft guarantee (directors guarantee) you would be liable to pay the overdraft on demand.

 

If you cannot pay it in one lump sum you can offer them a repayment plan. If you do this should be a plan you determine for yourself, not one they impose upon you.

 

Start paying it as soon as you can.

 

They have two choices at that point. They can accept the plan or take you to court to get a CCJ. If they do the latter and win you can then make the judge aware of your financial circumstances and show that you have offered a payment plan and you are paying it.

 

I would think the judge would then set the repayments in line with or close to your plan, and possibly give the opposing side a kicking for wasting everybody's time.

 

ONLY if you fail to pay the CCJ or maintain an agreed payment plan can the bank then apply for a charging order on your home.

 

Assuming my scenario is right they cannot get a charging order until 1. they have secured a CCJ and 2. you have failed to make payments that the court has set then Lloyds TSB are a bunch of b......s for even talking about charging orders at this point.

 

Given that they are I would demand they produce all the paperwork relating to the overdraft first to substantiate their claim.

 

I would also consider reviewing the entire account to see if you can challenge any of the charges, if there were any. I know this has become harder now but it is not off the table.

 

As I said at the top, wait for other CAGers to comment as they may correct me or amplify some of my comments.

 

By the way was it just yourself that signed a directors guarantee or did any fellow directors also sign.

Edited February 14, 2010 by comebackjimmy
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