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I had a debt of circa £18K to HSBC due to a personal guarantee.

In Nov 2007 this was sold to Robinson Way and I made regular payments up until April of this year.

In total I have paid 12k.

After April I tried to negotiate a full and final settlement, but we could not agree.

I submitted a SAR, and I received the information today.

 

They sent me a copy of the personal guarantee and here it states

"The aggregate amount payable by you under this guarantee (which includes the amount due under the indemnity in clause 15) shall be limited to the sum of £10,000.00 (Ten thousand pounds sterling) and interest on that sum as mentioned in clause 2b above together with the money agreed to be paid under clause 17.

 

Clause 17 referes to fees expenses, legal and administrative incidental to the enforcement of the guarantee.

 

This appears to indicate that my liability is £10,000 and I have already paid £12,000. This would mean I have no further liability.

 

Can someone confirm my understanding is correct.

 

Thanks.

John.

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Sounds like it to me.. however, I will try and find someone with more knowledge to advise.

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It would seem that you are liable for interest on the £10,000 as mentioned in clause 2b plus any expenses caused by the enforcement of the guarantee.

It may also depend on what amount is stated in clause 15.

 

Included among the paperwork from the sar should be a statement of how much you have paid of date and how much is still outstanding. There should be additional figures showing

how they arrived at the figure you are required to pay under the guarantee by way of additional fees etc and interest.

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The company was wound up in feb 2006 with balance of 19,702 on the HSBC account.

The balance on the HSBC account was 22,237 on 13 Nov 2006 when the account was closed and sold to RW. The difference is interest and charges.(2,535)

 

The openiing balance on the Robinson Way account is 18,500 in November 2006.

My payments to Robinson Way total 12,080 and the balance to pay is 6,420.

 

I cannot work see any rational for the 18,400 opening balance.

 

Clause 15. mentions a seperate obligation, but subject to the limit in clause 4.

 

I much appreciate your advice.

John.

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You would have to ask Robinson Way how they arrived at the figure of £18,500. From what you said, it looks as if the figure includes the interest and charges as if you agreed

back in 2006 to pay off the amount in 6 years. If that is the case you would need to know the rate of interest charged over the term, since the rates have fallen over the past few years.

Was there any mention of the interest rate when your guarantee began. You also need a breakdown of what charges were added at the time.

 

I am not au fait with how personal guarantees work when they are called in. Did you have to sign an agreement to pay off the amount over a certain period at a fixed rate or was

there another way of arranging it?

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No charges have been added by Robinson Way.

The 18500 opening balance reduced by the amount of my repayment. The account was then in default and I belive that interest and additional charges would be frozen.

 

No agreement was signed to repay Robinson Way except for an offer to pay £220 per month which was accepted.

A personal gurantee just establishes the limit of liability to the bank in the event of a default. This limit in my case is £10,000 plus interest. The interest is in the order of £2000 charged by HSBC.

 

I am not sure whether the gurantee applies to to the debt when bought by a third party and whether the limit of liability still apply.

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Thank you BPRMS. I take it that you paid a lump sum to RW at the start of the "relationship" perhaps to secure the freezing of interest and charges.?

 

You are correct in saying that you are only liable for £10,000 plus interest and specific charges. However it seems that RW and/or HSBC may not have aware of that.

[£2000 interest on £10,000 for 7 months would be exorbitant but much more likely on on a balance of almost £20,000 ]HSBC transferred the whole amount to RW and they have carried on

as if you are going to pay back the whole amount. Perhaps they are unaware that you are only

obligated to pay £10,000 capital and not the whole amount. It might be an idea to point that out to RW and at the same time add that you are only liable for interest on £10,000 of the debt from HSBC not

on the whole amount.

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