Advice needed with an HSBC PERSONAL GUARANTEE

[littlenonni2012]

Hello Ive just joined this wonderful forum and I have read a thread here recently, regarding personal guarantees.

 

 

I am at the stage now where i have received from HSBC's solicitors a county court claim for £24,000.

(i was a guarantee for my small company that is no longer as it went into liquidation)

 

 

I have defended this with a solicitor but have just decided to 'go it alone' due to solicitors costs! (aside from the fact that my solicitor isnt even on my side! he says ive signed and thats that!)

 

I am not sure whether to apply to the court for a strike out.

I have read on a thread here, t

hat a guarantee (according to the House of Lords) cannot be responsible for the debt of somebody else or company.

 

 

although my company was a Ltd company at the time i signed the guarantee

. But I'm not sure how to present this.

 

I was truly misrepresented when I signed the 'guarantee' and i used this as my defence amongst other things, but the HSBC replied to our defence to our solicitor and said they deny our defence.

 

Needless to say i am getting more grey hair by the day!

as my company went into administration in 2010

and obviously now nearly 2 years later this is still going on!

 

I think its safe to say I'm sending out an 'SOS'

[peebeeh]

Hi,

I will watch your thread and if at any time I think I can offer anything based on my experience I will chip in with pleasure.

It looks like the 1st thing you've got to do is answer the claim - the guidance pages that come with it tell you the time limits etc for responding and the time you then have to prepare your defence if you are going to defend the claim. If you don't respond you'll get judgement entered against you in default. (this happened to me and I recommend that you avoid it)

peebeeh

[littlenonni2012]

Hi Peebah,

we have received a response from HSBC's solicitors after their delaying tactics, they are asking if we are willing to enter into negotations.

Do you know what a company would accept as a settlement offer?

I have read somewhere about these debt companies that purchase debt and accept as much as 80% off the original claim/amount

[peebeeh]

I think that entering into negotiations may be seen as an admission to liability of the debt, so be careful before starting on this. You need advice from someone better qualified than me.

 

I am not sure if 'without prejudice' would help?

[asokn]

Entering into negotiations is very much encouraged and not an admission of liability at all. Do head your correspondence 'without prejudice save as to costs' though for the avoidance of doubt.

 

As for what the creditor will accept, I'm afraid I just don't know. Start low and give yourself room to negotiate.

[littlenonni2012]

Thanks Peebeeh, I agree! its more or less admitting liability, if we're liable for some, then the bank will say we are liable for all.

I am going to stick to my guns, I am going to be applying to the court for a strike out action, within the next day or so. I will let you know how it goes:!:

[Gaston Grimsdyke]

Bad idea. You are not admitting liability by negotiating, you are simply insuring against the risk of losing at trial. Judges don't like parties who refuse to talk to each other. Of course if you have a 100% cast iron case that's a different matter, but chances are you don't. If the form you signed clearly states it is a guarantee there is at least a risk you will lose.

 

The bank are offering to negotiate for the same reason. They will prob accept half the debt to go away.

[littlenonni2012]

Ok Gaston, thank you. I honestly am so grateful for people such as yourself who spend your free time advising and helping people like me! thank you.

[littlenonni2012]

Bad idea. You are not admitting liability by negotiating, you are simply insuring against the risk of losing at trial. Judges don't like parties who refuse to talk to each other. Of course if you have a 100% cast iron case that's a different matter, but chances are you don't. If the form you signed clearly states it is a guarantee there is at least a risk you will lose.

 

The bank are offering to negotiate for the same reason. They will prob accept half the debt to go away.

 

Can anybody advice please

I have just reviewed the guarantee again just to try and find something somewhere.

I have noted on the top of the guarantee it states 21st......*& (i.e my previous company) Yet according to the House of Lords and on this forum, one cannot be liable for the debt of somebody/someone else?

and secondly

section 1 says

the debt is not

(b) If you are a corporate body, such part (if any) of the debt as may have been incurred by the borrower, directly or indirectly, in connection with the aquisition of shares in your share capital (or in the share capital of any holding company) unless and to the extent that the provision of financial assistance by this guarantee in connection with that acquision is lawful.

 

my previous company was one ltd by shares. So does this mean that im only liable for the amount I had in shares?

Is there somebody that understannds guarantees that can explain this?

thank you

[peebeeh]

It is possible to copy your guarantee, black out the personal information, scan and make it a pdf and load it up here on the forum. someone may well be able to give further advice to you

 

go advanced when you want to post and upload your document by selecting attachments

[littlenonni2012]

ive managed to attach 5 theres two more pages!

 

last two (not sure if you need the Final page which has our signatures?)

 

Hi Peebah,

the enclosed guarantees are photocopies of the original (i have never actually received the original from them)

but something is still telling me that there is a fundamental mistake with this guarantee.

I think it is in the first page where it states 'guarantee' then under it our company name.

Is there anybody that understands contract law? or the interpretation of some of the points they have raised??

 

anyone there?

[toddle2u]

Unfortunately I can't read the documents you have put up. Are you able to put them up as a PDF?

 

I think it is in the first page where it states 'guarantee' then under it our company name.

OK I have had a look at the guarantee now. You are on the wrong lines with regards to the above. It actually states You and your co-Director (I assume) will act as Guarantors to xxxxx Bank Plc for the debts 're: xxxxxxxx Ltd'. Also the front page is a summary of your liabilities under the Guarantee.

 

I have noted on the top of the guarantee it states 21st......*& (i.e my previous company) Yet according to the House of Lords and on this forum, one cannot be liable for the debt of somebody/someone else?

I am aware of this case and this is only applicable if you are not aware that you were guaranteeing a third party debt (to summarise). Clearly by the docuemnt you have signed and the fact that they have instructed you to seek legal independant advice before signing, itis headed Guarantee in capitals you were aware of what you were signing. It is my opinion that you would struggle in any way to get out of the PG on a technicality.

 

Best advice start negotiating with the bank on a repayment plan. Your liability is limited to £25K

 

Sorry can't give more positive news.

[littlenonni2012]

hi there thanks for the advice. We genuinely believed we were only signing for the company, hence why we Limited the company. Because at the end of the day we assumed that we were only liable for what the limited company was. If that makes sense. We didnt get advice independantly as the HSBC gave us the overdraft facility before we signed the guarantee. I remember at the time the bank manager saying, 'i must make time to come down to the branch and sign the agreement'

We was literally in the bank minutes and was out again. There was none of the, reading through contracts, going away and thinking about it! We was given the money before we even signed the contract. and at the time our company was so busy, i literally went into the branch, signed and was out of there. I would have signed my own death warrant at the time, because i remember being so incredibly busy and tired at the time and i signed without even reading. My bank manager told me it was just formalities! i stupidly believed him. now im paying the price. I was mislead. i know that but i cant prove it, very expensive mistake. As for the HSBC, as the old saying goes, every dog has its day.

[asokn]

Unfortunately the legal onus is on you to take advice before signing and, if you do nothing else, at least read the agreement before signing.

[littlenonni2012]

tell me something i dont already know........why do you think i havent applied to go for a strike out action? even though i know there are certain things i can use (a whole list in fact) its for that very statement you have said 'unfortunatley the legal onus is on me' and its proving in court. If i had a crystal ball and knew what mood the judge would be in on the day, i would go to court and put my defence forward but i havent.

[asokn]

I was replying to the further points you raised in your post. Please try to remain calm. If you did not need assistance then there was no need for you to raise those issues.

[littlenonni2012]

hugh,

you mentioned try to remain calm?

thats the problem i am calm. perhaps too calm.

 

 

You mistook the written word or interpreted my reply incorrectly i guess.

(thats the trouble when you write in forums, the written word is often interpreted differently)

 

but on a side note please only use this thread if you are adding something positive.

 

 

It is a good thread so far and members on here have been extremely helpful.

 

 

So please lets keep it that way:-)

[asokn]

In what way have I not been positive?! This is utterly ridiculous, I inform you of the legal position politely and clearly in an effort to help you then you fly off the handle because you don't like bad news and now you're blaming me! Unbelievable.

 

Good luck with your problem but I won't be adding any more of my apparent negativity by posting further. Maybe others are more prepared to take this kind of nonsense when they give their time and legal knowledge for free but I'm not.

[littlenonni2012]

Is your rant over? (God I thought it was just us women:violin: )

or has that spring sunshine gotten to ya head? Enough already.

You stated earlier 'you should look before you sign' (see your earlier post if you can't remember posting this)

Now with all due respect I've already signed the contract, like, two years ago. But then maybe if you had read my first post you would have known that.

As for 'I dont like hearing bad news' (another one, of your great contributions to this thread) I must ask, Do you honestly believe that you are the first person to give me 'bad news'? But I will emphasize again. (for your benefit) I was merely asking if anybody knows of any legal loop holes and there is and there are. BUT I am not confident enough to go to court and use what a previous forum member on here has stated (about the house of lords). I dont even know whether that has been used before in court.

 

Now I'm not sure about you, but I'm not prepared to ruin a decent thread with any more of this banter.

So Please for the sake of everybody on this 'adult' forum lets just move on.

[toddle2u]

I was merely asking if anybody knows of any legal loop holes and there is and there are

 

Whilst this is true I do not think in your instance there are any. I have posted in other threads concering PG's that a Judges view is that 'if it looks like a PG, it says it's a PG then it is a PG' - rightly or wrongly. It is then up to you to prove your case that it isn't. In your instance I do not think there is any arguement at all that the document is a PG. Your only possible arguement could be in the way it was executed and even then I beleive you would struggle. If you went to Court and argued your case in relation to the manner the bank conducted theirselves and lost you could well be liable for their costs as well which could run into 5 figures. As advised previoulsy start negotiating with them. I will PM you a firm you could contact who specialise in this (I have no commercial connection with them)