Stautory Demand - I need Help Please!

[LouLou70]

Hi,

Hi to everyone - I hope you can help me. Last year (2 Dec 11 to be exact) I unfortunately had to put my business of 8 years into voluntary liquidation. It was extremely upsetting to say the least.

I had three personal guarantees signed on overdrafts or heavy equipment leases; one each with HSBC, Academy Leasing and CVF. The Academy and CVF ones are joint and several with another ex-director.

Having suffered the loss of the business, I had no income obviously and wrote to each of these companies in turn with a Citizens advice Bureau prepared statement of my personal financial affairs.

 

Yesterday, however, I received a Statutory demand from Bermans Solicitors on behalf of Academy Leasing demanding the £17,955.91 that they claim we owe them. we have both disputed the total amount we owe them is £17K because we feel that they completely undersold the equipment in an attempt to recoup some of their money and have not (after numerous requests) provided us with any proof that they received fair market value for the machinery they sold. It looks on the surface that they have sold it back to the manufacturer directly for a significantly reduced sum, a company with whom they have considerable dealings - it looks quite dodgy actually.

 

Whilst they seemed to ignore my last request to them for information regarding the offers they received, they did write back to the other guarantor and say that it was an all monies guarantee and that they were under no obligation to mitigate at all. Surely though, if they have chosen to mitigate their losses they have to be fair and reasonable to us as guarantors?

 

I intend to try and have the Stat demand set aside. Can anyone offer some advice please???? Thank you.

Edited October 25, 2012 by LouLou70

[unclebulgaria67]

I think you need some proper legal or business debt advice. The chances are that the other companies you had the personal guarantees with will be after you as well. You could try to get it set aside, but this may not work. How did they actually serve the SD on you ?

 

What is the total amount of debt owing on the guarantees that you might be liable for ? What personal assets do you have at risk ?

[Bandit127]

As far as I understand it then, the machinery was provided under a Hire Purchase agreement. They have repossessed the security and apparently sold it at undervalue?

 

They have also failed to provide a full statement of account. Have you requested one in writing?

 

Despite what any agreement says, I think they have a common law obligation to look after your interest if they want to claim the shortfall.

 

Have you got a copy of the agreement?

[Bandit127]

Thanks UB.

 

A link for LouLou:

Business Debtline

[LouLou70]

Thanks both Bandit and UB. Just for the record I don't have any personal assets. If they bankrupt me then so be it. However, I would like to avoid it if possible! Legal advice is difficult if you have no money to pay for it! I have been offered a small sum by a family member to help try and settle - it's not a lot but more than they will get if they bankrupt me I guess. The total debt being claimed is £40K. We are negotiating with HSBC and CVF (we also have disputed the way they handled the sale of equipment having also undesold it!) currently so we will see what happens there.

 

Yes, Bandit, I do have a photocopy of the agreement that they sent me in January. It is very difficult to read and in my last letter to them in May I did ask them to send me a more legible copy, as well as the details of the offers that they received for the equipment. I have not had a reply on either count.

[Guest]

loulou

some info re stat demands etc

http://www.bis.gov.uk/insolvency/Publications

[unclebulgaria67]

Thanks both Bandit and UB. Just for the record I don't have any personal assets. If they bankrupt me then so be it. However, I would like to avoid it if possible! Legal advice is difficult if you have no money to pay for it! I have been offered a small sum by a family member to help try and settle - it's not a lot but more than they will get if they bankrupt me I guess. The total debt being claimed is £40K. We are negotiating with HSBC and CVF (we also have disputed the way they handled the sale of equipment having also undesold it!) currently so we will see what happens there.

 

Yes, Bandit, I do have a photocopy of the agreement that they sent me in January. It is very difficult to read and in my last letter to them in May I did ask them to send me a more legible copy, as well as the details of the offers that they received for the equipment. I have not had a reply on either count.

 

Get some proper debt advice, by first phoning the business debtline. If you have no assets, it actually might be worth baiting these companies to make you bankrupt at their cost. I suspect that if they look into your financial situation, they will realise that it is not worth it, but the trouble if, once the SD is properly served they do not expire as such. Therefore at any time within 6 years (normal statute barred rules) they could proceed with the bankruptcy, if your financial position ever improved. If you find that these companies appear to be sitting and waiting, you might want to consider making yourself bankrupt. The number of times I have read of people being chased for money say 5 years down the line and in that time they have moved on in their lives, only to be troubled by these past debts.

[Bandit127]

If they bankrupt me then so be it. However, I would like to avoid it if possible!

I am with you there. 49% of me wants HSBC to issue a SD for my mortgage shortfall of £50k and get it all over and done with. Yes, I earn good money and I would be (basically) on benefits for 3 years.

 

But 51% of me disagrees, so I am fighting on...

 

Good luck.

[IdaInFife]

Yes it has been approved in the past

[unclebulgaria67]

Yes it has been approved in the past

 

What question were you answering ?

[IdaInFife]

I am answering my own UB.

 

wrong thread

 

[LouLou70]

Thanks for the publications link. I have already read it.

 

I have also had some good debt advice and I am pretty OK with the current 'game plan'. We are genuinely disputing the actions of Academy and CVF particularly with regard to their disposal of the equipment.

 

So I guess that my question is "can I/how do I go about having the Stat Demand set aside on the basis that we are in dispute over the amount owed to Academy because they treated us unfairly/unreasonably as Guarantors by selling the equipment at a huge undervalue and not providing us with details upon request of how they achieved fair market value"?

[42man]

Have you queried this already (the dispute) Have they answered it ?

[LouLou70]

Hi 42Man.

 

Yes, my last letter to them was in May after I had received a letter from them saying that they had sold the equipment. They enclosed copies of the invoices they had raised to show the amount they had achieved on the sale. The equipment was less than 6 months old and they sold it drectly back to the company who 'sold' it to me for less than 50% of the new price. I expressed my concern that the price achieved was very low even for second hand commecial laundry equipment and asked to send me details of other offers they had received to prove that they had got 'fair market value'. I never had a reply to this letter.

[42man]

In which case you still have the dispute ongoing. You will need to highlight the letter you sent (without the response)

[LouLou70]

Do you mean in my application to set aside the Stat Demand?

[42man]

Yes

[42man]

Is it usual that these pieces of equipment devalue so much in such a short time ?

[unclebulgaria67]

The point is that this company have not really entered into real communications about the basis of this debt and therefore they have jumped the gun in using the insolvency system.

 

How was the SD served on you ? This is important as it could be another reason to get it set aside if it was not done properly.

[LouLou70]

The Equipment doesn't usually depreciate that quickly. It is lifed for many years as it commercial grade. There are many second hand sellers out there who sell this kind of equipment on for substantial prices.

 

The SD was posted to me. Not recorded.

[LouLou70]

I should also mention that the other Guarantor has not recieved a Stat demand. He has not had a response to his requests for the documentation about other quotations either although he has had some correspondence from Academy's Solicitor (Bermans). In their last letter to him they said that their client had no obligation to mitigate at all. He has gone back to them and said that as they have chosen to mitigate then they should be acting reasonably and fairly to all parties.

[unclebulgaria67]

The Equipment doesn't usually depreciate that quickly. It is lifed for many years as it commercial grade. There are many second hand sellers out there who sell this kind of equipment on for substantial prices.

 

The SD was posted to me. Not recorded.

 

The SD was not correctly served. According to the involvency service information I have read previously, they have to first try to serve the SD in person, using an accreditied server. Only after two failed attempts to serve in person, can they send the SD by normal Royal Mail post. I am not sure whether it is worth or wise to ask them for proof that a process server tried to serve the SD by hand, before it was posted.

[Guest]

where is that from?

according to the gov't info posted, 'there is no expiry period for a stat demand'. (unless statute barred, or setaside), but suppose the longer its left, the less credibility it would have?

re service of an sd, and petition, etc have a look at The Insolvency Rules.

'2) The creditor is, by virtue of the Rules, under an obligation to do all that is reasonable for the purpose of bringing the statutory demand to the debtor's attention and, if practicable in the particular circumstances, to cause personal service of the demand to be effected.'

so, 'substituted service' can be acceptable depend on circumstances, as stated in the rules. also see rule 6.11 etc

Edited October 26, 2012 by Ford

[Guest]

well, as i see it, rule 6.11 (re petitions) doesn't state that an sd must have been personally served for there to be a petition rather just that it has been deemed served as required by the rules. and an sd can be deemed 'served' other than by personal service depending on the circumstances ((2) above). 6.11 (5) says that if not personally served, or service is not acknowledged, then the required affidavit must explain the particular service. then up to the J to consider/decide in the circumstances!

(6) allows for substituted service of a petition depend'g on circumstances re sub service of an sd.

but, they (those sols) do disclaim by saying 'in most cases' ie depends on the circumstances!

Edited October 26, 2012 by Ford

[Guest]

loulou

also see any case law re any interpretation of the rules/any precedent.

you mention no sd re other guarantee. afaik, a 'creditor' might 'choose' to only pursue those g's that they consider to have 'sufficient means to warrant pursuing'?

as has been posted, if there is deemed a poss triable issue/dispute/counterclaim then set aside should be considered at hearing. also, is the actual guarantee poss defective? all things that can be mentioned on application.

as you point out, there is that 'gamble' ie where there is no personal service and no acknowledgment of sd, then any explained 'alternative' 'service' may turn out to be unacceptable by J re a petition.

ps, presume this re a personal sd and not one against a company?

Edited October 28, 2012 by Ford