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      International Debt Recovery/Legal UAE debt - scotland

      By dx100uk · Posted

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    • blfuk1
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      By blfuk1 · Posted

      I used to post regularly in order to provide factual information (rather than advice) but got fed up with banging my head against a brick wall in so many cases when posters insisted black was white and I was writing rubbish. I have never posted anything which was untrue or indeed biased in any way.  I have never given 'advice' but have sought to correct erroneous statements which were unhelpful. The only username I have ever used is blf1uk. I have never gone under any other username and have no connection to 'bailiff advice'.  I am not a High Court Enforcement Officer but obtained my first 'bailiff' certificate in 1982. I'm not sure what records you have accessed but I was certainly not born in 1977 - at that time I was serving in the Armed Forces in Hereford, Germany (4th Division HQ) and my wife gave birth to our eldest.   Going back to the original point, the fact is that employees of an Approved Enforcement Agency contracted by the Ministry of Justice can and do execute warrants of arrest (with and without bail), warrants of detention and warrants of commitment. In many cases, the employee is also an enforcement agent [but not acting as one]. Here is a fact.  I recently submitted an FOI request to HMCTS and they advised me (for example) that in 2022/23 Jacobs (the AEA for Wales) was issued with 4,750 financial arrest warrants (without bail) and 473 'breach' warrants.  A breach warrant is a community penalty breach warrant (CPBW) whereby the defendant has breached the terms of either their release from prison or the terms of an order [such as community service].  While the defendant may pay the sum [fine] due to avoid arrest on a financial arrest warrant, a breach warrant always results in their transportation to either a police station [for holding] or directly to the magistrates' court to go before the bench as is the case on financial arrest warrants without bail when they don't pay.  Wales has the lowest number of arrest warrants issued of the seven regions with South East exceeding 50,000.  Overall, the figure for arrest warrants issued to the three AEAs exceeds 200,000.  Many of these were previously dealt with directly by HMCTS using their employed Civilian Enforcement Officers but they were subject to TUPE in 2019 and either left the service or transferred to the three AEAs. In England, a local authority may take committal proceedings against an individual who has not paid their council tax and the court will issue a committal summons.  If the person does not attend the committal hearing, the court will issue a warrant of arrest usually with bail but occasionally without bail (certainly without bail if when bailed on their own recognizance the defendant still fails to appear).   A warrant of arrest to bring the debtor before the court is issued under regulation 48(5) of The Council Tax (Administration and Enforcement) Regulations 1992 and can be executed by "any person to whom it is directed or by any constable....." (Reg 48(6).  These, although much [much] lower in number compared to HMCTS, are also dealt with by the enforcement agencies contracted by the local authorities. Feel free to do your own research using FOI enquiries!  
    • London1971
      Scammed - left with £40k of debts I can no longer pay

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      3rd one seems the best option, let 'em default, don't pay a penny, nothing will happen, forget about all of this. As for Payplan don't touch them with a bargepole, nothing they can do that you can't, and they will pocket fees. A do it yourself DMP is pointless as it will just string out the statute barred date to infinity.
    • Moomoo11
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      Because that’s what the email said. Anyway it’s done now. Posted and image emailed.    im doing some reading in preparation for defence but I will need my hand holding quite tightly by you good people.  I’m a little bit clueless
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      By dx100uk · Posted

      how did you pay for it please? dx  

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Parcel delivery insurance is prohibited under section 57 – Consumer Rights Act – Read about It Here and in The Times.

My debt or my limited company's debt?

speedy_gonzales

By speedy_gonzales
in Financial Legal Issues

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speedy_gonzales

speedy_gonzales

Posted
Posted (edited)

Hi all,

 

I have had a look through all the various forums and sub forums and decided to place my post here as there seems to be nothing totally related to business debts for limited companies. If the moderators feel this post is in the wrong section, then please feel free to move it.

 

OK. My question is this. I am being taken to court (small claims) for a debt of just over £3000. This debt was incurred to a company which I was originally setting up. It was a private limited company with myself as director. The money was loaned to me by a friend and knew exactly what the loan was being used for specifically, and where the money was going, ie into my company bank account. There is a paper trail to prove the transfers and movement of the money from account to account as at the time of the initial loan, the company account was in the process of being set up.

 

Unfortuntely, I became one of the statistics of new start companies and ended up going under. Although not in adminsitration, I have not traded the company for many months.

 

My question is, under the way that debt is dealt with when dealing with a limited company, can this person take me to small claims, and if they can, what is the likely outcome? I have not disputed the claim on the forms, but have specifically said on them that the debt is one of the limited company's debts and not mine personally (which is how it has been stated on the plaintiffs form). I would also like to know if a loan agreement of any kind, be it personal or otherwise has to have a purpose or description of goods incorporated into it.

 

Any advice would be gratefully received.

Edited by speedy_gonzales
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Still_surviving

Still_surviving

Posted
Posted

If the money was loaned to you and you then introduced the money into the company I would say (as an accountant) that the loan was a private transaction, not a company one. It was your choice to then put the money into the company via your directors loan account.

 

If you have any paperwork to the contrary proving they lent the money to the company, then that would negate my argument, otherwise you would have to prove to a judge that the claimant knew exactly where the money was going and why. Even then, I think you are on a sticky wicket if you dont have paperwork with the company's name on it.

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marmaris30

marmaris30

Posted
Posted

If this person knowingly made a loan to your company and you have an agreement that proves this, then you would not normally be liable personally for your company's debts. There is no need for any link to goods or a specific purpose. However your friend might try to claim that the company, being dormant, has no prospect of paying it back and that you have acted recklessly as a director in allowing this to happen. If you have exercised your directorial responsibilities to the best of your ability then this should not be too much of a risk.

 

However if your company has a debt or debts it cannot service then it is insolvent and it is really your responsibility to wind it up, because otherwise a creditor can present a winding-up petition to a court and have it put into administration. Then the Official Receiver would become involved, who would not look on you favourably for having failed to address the problem earlier. Perhaps you should speak to a solicitor about both matters.

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speedy_gonzales

speedy_gonzales

Posted
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If the money was loaned to you and you then introduced the money into the company I would say (as an accountant) that the loan was a private transaction, not a company one. It was your choice to then put the money into the company via your directors loan account.

 

If you have any paperwork to the contrary proving they lent the money to the company, then that would negate my argument, otherwise you would have to prove to a judge that the claimant knew exactly where the money was going and why. Even then, I think you are on a sticky wicket if you dont have paperwork with the company's name on it.

 

This person lending me the money knew EXACTLY where the money was going and for what purpose. I think it prudent to add that the Plaintiff has actually stated on her initial court form that it was a business loan.

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speedy_gonzales

speedy_gonzales

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If you have exercised your directorial responsibilities to the best of your ability then this should not be too much of a risk.

 

 

I have acted according to my responsibilites as a Director, and ceased trading as soon as I knew things were going pearshaped. I have been waiting for one of the biggest creditors to wind the company up, as they agreed in principle to do so.

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Still_surviving

Still_surviving

Posted
Posted
This person lending me the money knew EXACTLY where the money was going and for what purpose.

 

My point is/was - can you prove this with an agreement bearing the company's name? If you cant ie no paperwork, or paperwork in your name, it will be down to the judge lottery if it gets to court, and I still think the odds would be against you.

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speedy_gonzales

speedy_gonzales

Posted
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My point is/was - can you prove this with an agreement bearing the company's name? If you cant ie no paperwork, or paperwork in your name, it will be down to the judge lottery if it gets to court, and I still think the odds would be against you.

 

Unfortunately not. Surely if this person has stated in their opening gambit on the court forms that they knew it was for a business purpose, surely this is good enough? They have admitted already they knew of the purpose.?

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Still_surviving

Still_surviving

Posted
Posted
Unfortunately not. Surely if this person has stated in their opening gambit on the court forms that they knew it was for a business purpose, surely this is good enough? They have admitted already they knew of the purpose.?

 

If they have said this on their claim form, then the waters are getting a little murkier. However, 'business purposes' is not a definite knowledge that they intended to lend to a limited company, and its the 'limited' bit that is so important. I would suggest trying to find a legal brain on this site who could perhaps look at their claim form, or failing that, see a solicitor.

 

At the moment, I stand by my original post, but thats as an accountant, not a solicitor.

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marmaris30

marmaris30

Posted
Posted

Well since it looks like you've fulfilled your directorial responsibilities as far as you can, and you apparently have evidence that the loan was made directly to the company, then your defence can be that you are not personally liable, as this money was never in your possession and was knowingly lent to a company. You could ask for your claim to be struck out as manifestly invalid, although a skeleton defence explaining the facts and supporting evidence available would look better. If you get a solicitor to advise you and draft the defence then it should be solid, although you'd have to pay for that of course and in small claims, applications for costs are very limited.

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Still_surviving

Still_surviving

Posted
Posted

The problem you have is this....

 

He/she could say "Mr.Gomzales told me he was going into business and I thought it was a good prospect so agreed to lend him £3000. I then found he put the money into a limited company and is trying to avoid repayment as the company has gone bust".

 

I think on that scenario, you would lose, in the absence of any paperwork showing intent to lend to the company direct....however as I said - find a better legal brain than mine :)

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marmaris30

marmaris30

Posted
Posted

As an aside, I wouldn't lend money to a company without security, either over assets or a personal guarantee. If he had actually lent it to you personally to help the business then it would be a completely different matter, but evidently he didn't. That your friend is less cautious is his problem.

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speedy_gonzales

speedy_gonzales

Posted
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The problem you have is this....

 

He/she could say "Mr.Gomzales told me he was going into business and I thought it was a good prospect so agreed to lend him £3000. I then found he put the money into a limited company and is trying to avoid repayment as the company has gone bust".

 

I think on that scenario, you would lose, in the absence of any paperwork showing intent to lend to the company direct....however as I said - find a better legal brain than mine :)

 

This person lending to me knew exactly to the letter where the loan was going to and for the exact purpose of disposal of the funds through the business. Surely that is fairly clearcut?

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marmaris30

marmaris30

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Still_surviving, point taken. Although unless the lender was particularly unaware of the distinction between individuals and companies, or there was a deliberate attempt to mislead, there doesn't seem to be any implication of self-employment. As long as any money taken out of the company by the shareholders (presumably the OP) was reasonable under the circumstances, and any loans to directors were repaid in full, and especially if there were any staff then that would put any such allusions to bed.

 

If the company was a tax shelter for self-employment then that would be a different matter, but the OP does not suggest it was.

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speedy_gonzales

speedy_gonzales

Posted
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Still_surviving, point taken. Although unless the lender was particularly unaware of the distinction between individuals and companies, or there was a deliberate attempt to mislead, there doesn't seem to be any implication of self-employment. As long as any money taken out of the company by the shareholders (presumably the OP) was reasonable under the circumstances, and any loans to directors were repaid in full, and especially if there were any staff then that would put any such allusions to bed.

 

If the company was a tax shelter for self-employment then that would be a different matter, but the OP does not suggest it was.

 

 

The lender had access and copies of the certificate of incorporation of the limited company so knew full well that it was for a limited companys useage and not that of someone merely self employed. No misleading of the lender was carried out, however, I feel the lender is just miffed now that they cannot get their money back through the normal channels now the company has ceased trading.

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Still_surviving

Still_surviving

Posted
Posted (edited)
The lender had access and copies of the certificate of incorporation of the limited company so knew full well that it was for a limited companys useage and not that of someone merely self employed. No misleading of the lender was carried out, however, I feel the lender is just miffed now that they cannot get their money back through the normal channels now the company has ceased trading.

 

Okay...but prove it.

 

"Follow the money" is often a phrase used in times of litigation. From what you have said the money went to you first, so that imho could be your undoing.

 

I dont want to get your hopes up, so perhaps Im being pessimistic - but if the claimant has a half decent legal brain/solicitor they will go down the lines I have stated.

Edited by Still_surviving
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speedy_gonzales

speedy_gonzales

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Yes I understand the burden of proof thing here. But my point is, if they KNEW categorically and have admitted it in their opening gambit to the court office, surely this is THEIR undoing? I am not trying to shirk debt here, despite what it may seem, however, I am merely trying to impress on the lender that they knew what the funds were for, where they were going, who, ultimately would be "using" them etc. I have had a few creditors on my case lately as the company left a few debts, but all of them have agreed that once the company is "administered" offically, then the debts would only be paid out if the company had assets/funds remaining (which it doesnt).

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Still_surviving

Still_surviving

Posted
Posted

You say they "have admitted it in their opening gambit to the court office"

 

Saying they knew the loan was for business purposes is not the same as admitting it was their intent to lend to a limited company. However the wording of the claim form is important imho.

 

Might i suggest you flag a moderator, and get this thread moved to the 'legal issues' section where perhaps you will get some more finite advice if you upload the form N1

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