Directors Guarantee / HSBC claim

[mullycat]

Back in October 2004 – I gave HSBC a Legal Mortgage as a directors guarantee of £45K on my home to support loans to my business.

My business ceased trading just over a year ago, with 40k of OD / loans. I offered them £400pm but they refused.

 

Now HSBC have filed to take legal charge over the property as we have not come to a repayment agreement, HSBC believe the is equity to be had so are looking for the sum to be repaid with 2 years or sooner.

I have an appearance @ Court next week.

Interestingly I signed the Legal Mortgage but no DE bencher was ever given. I also believe the HSBC facility letters to the company offering funds were never signed either– so in theory were not an authorised lending from a company perspective.

My questions are :-

Should this loan be regulated by the consumer credit act ? as I’m a consumer – not sure if this helps me

Will the fact that the facility letters are unsigned mean I can claim this is not a secured loan?

 

I am happy to repay any sums owed but obviously want to limit impact on my family

[marmaris30]

Not regulated under the CCA because (a) it was not a consumer loan and (b) it was over the limit of £25k.

 

You might get somewhere with the letters not being signed, but if the mortgage was properly registered with the Land Registry and your company actually did receive the benefit of that mortgage, then HSBC would probably argue that the lack of signature does not amount to lack of an executed agreement. Essentially, you would need to argue that the guarantee is invalid but that could be difficult without evidence of coercion or something.

 

You would probably be best advised in any case to do a SAR on HSBC, and then take all the info received to a business solicitor.

 

Hopefully others will also give you their views.

[mullycat]

Thanks very much for your reply

I won't have time to do a SAR as the hearing is next week

 

I just wondered if these would / could be classed as unauthorised by the business so the bank should not of kept servicing them.

the loans were created by the bank from unauthorised OD usage which it turn was created by delayed repayment of a trade line.

[marmaris30]

I think this is quite a specialist area and the nature of the guarantees is only known to you and the bank. Given the short timescale available, the non-consumer nature of the debt, and the risk of losing the case, I suggest that you seek suitable legal advice.

 

A Charging Order is what they will be looking for, so that when you sell the house, they would be repaid. The good thing if your house is occupied by your family, is that the bank would probably find it very hard to get a Sale Order.