Personal Guarantee for Ltd company on Building Supplies

[medievil2003]

Hi all, good morning.

 

We owned a Ltd company which has just gone into liquidation and there are a list of creditors that are still owed money, we went through our own liquidator who sorted everything out for us. The list of creditors was given a chance for a creditors meeting and no-one turned up.

 

Since then, a building supplier company has been knocking on our door asking me for the money that is owed, i had totally forgot years ago i had signed a deed of guarantee under my name...

 

Because i was the director of the Ltd company, the company went under and so am i, not being able to pay any Credit cards etc it will be the same for this.

 

The building supplier has appointed this to a solicitor who is now chasing this and i am drafting a letter to them today with a payment offer per month only to what i can afford...now, on their letter it states this:

 

" X's claim is not one which is subject to any pre action protocol. this letter is written pusuant to section III of the practice direction pre-action conduct "the practice direction". Bearing in mind this is a debt which we do not believe that alternative dispute resolution is appropriate. However we would be prepared to consider any representations you may have in this respect."

 

I have a copy of the guarantee, this was signed but never dated - what can i do here? I have no other choice but to pay them bare minimum, is this a secured debt? or are the terms like those of credit cards in such respect?

 

Any help will be much appreciated.

[AndyOrch]

Hi Medievil.

 

Useful Information :- http://www.bdl.org.uk/images/10_EW_BDL_Limited%20Companies.pdf.

 

Regards

 

Andy

[medievil2003]

Hi Andy,

 

Thank you, i have just printed this off for a read.

 

Does it make a difference whether the PG has been dated? The signature is there but there is no date to mention when its legally bounded.

[AndyOrch]

Im not sure re the date and if that affects the execution...here are some key points from a usual requirement of PG,s.

 

(H) Guarantor requirements

Where our loan is to be guaranteed by a guarantor the following provisions apply:-

1. Interview with Guarantor

(a) Each Guarantor must receive advice from a solicitor who can provide independent legal advice. Such independent

advice may be given to a Guarantor by you, a solicitor within your practice or a different office of your practice or any

associated practice where you are satisfied under the Solicitors Code of Conduct that as the Guarantor will be a client

of the advising solicitor there is no conflict or no significant risk of conflict between the interests of the Borrower and the

Guarantor or any other Guarantors for whom you may act.

(b) If you are unable to provide the advice you must give each Guarantor a copy of our standard form Certificate of

Confirmation of Advice together with a copy of the Offer and explain that he must obtain advice from a solicitor who is

independent of the transaction.

© The solicitor giving the advice must sign and endorse the Certificate of Confirmation of Advice.

(d) A legal executive or licensed/registered conveyancer may not give such advice. Subject to the Solicitors Code of

Conduct on conflict, the same solicitor may advise one or more Guarantors.

(e) By signing the ROT you confirm that each Guarantor has received the appropriate independent advice in accordance

with these supplemental instructions herein and that you are in possession of a Certificate of Confirmation of Advice for

each Guarantor duly endorsed, dated and signed by the solicitor who has given the advice.

(f) The Deed of Guarantee must be signed by each Guarantor personally. The Deed of Guarantee may not be executed by

an attorney or any other person acting for or on behalf of the guarantor.

(g) The Deed of Guarantee should be dated the same date as the corresponding Legal Charge and the original returned to

us with the deeds.

(h) We will not release funds until you have sent to us either by way of facsimile or post (and we are in receipt of the same)

certified copies of the Deed of Guarantee duly executed by all Guarantors and dated together with a certified copy of

the duly signed and dated Certificate of Confirmation of Advice for each Guarantor. The Deed of Guarantee and

Certificate(s) of Confirmation of Advice must be dated the same date as the Legal Charge.

 

 

 

Regards

 

Andy

[AndyOrch]

Further tips:-Tactics to use if a personal guarantee is called in

 

 

If the worst happens and the personal guarantee is called in by the bank when your business doesn't have the funds to repay it, for example if you go into administration, you should take early advice and carefully consider the options available to you as the implications of the bank taking legal action can be severe.

 

You may firstly want to examine whether the guarantee is likely to be enforceable by the bank. For example, is it backed by a charge on your house; was independent legal advice given and can the original signed document be located by the bank?

 

The next stage is to look at your ability to repay the money. If the bank has a charge your house or believes there are other assets sufficient to repay the full amount then the room for negotiation of a lower figure in full and final settlement is more difficult, but not impossible. If you have little means to repay then the bank will take this into account during negotiations.

 

If you discharge the guarantee in full and there were co-guarantors, you may be able to recover from them their share of the total guarantee. The same applies if you pay the bank more than your share. But the opposite is also possible, so if the bank goes after one of the other co-guarantors, that co-guarantor may come after you.

 

As always, tactics and timing are crucial for any director who ends up in this unfortunate predicament.

[medievil2003]

Hi Andy,

 

Thank you so much for your help so far -

 

It does not relate to a bank but the letters i am receiving are from a solicitor of the building supplier, they were on the list of creditors when liquidation was being processed, i thought they would have turned up to the creditors meeting and put this forward. They may still try and claim for any money that was left in the bank at the time of it being frozen.

 

If this helps at all the terms on the signed document are:

 

1. In consideration of your agreeing at my reuqest to supply goods to: " x " hereinafter called "the Customer" I the undersigned

 

1.1 HEREBY UNDERTAKE AND GUARANTEE as Principal Debtor and not merely as Surety the due payment of all monies now due or which may hereafter at any time become due or payable to you from the Customer and

 

1.2 As principal debtor i agree to indemify you on demand from and against any loss costs and expenses on an indeminty basis you may incur as a result of or incur as a result of or in connection with the suppy of goods to the customer.

 

2. THIS GUARANTEE is to be a continuing guarantee and shall not be affected by your giving time or any other indulgence to the customer or to me and you may ay anytime or times at your absolute discretion and without giving any notice whatever to me refuse any or any further credit or supplies of goods to the customer or extend or any credit or credit facilities in the customers favour or grant any indulgance in respect thereof.

 

3. MY LIABILITY hereunder shall continue notwithstanding such rights of set-off or counterclaim as the customer might have against you and i undertake and agree not to seek to rely in any proceedgins issue by you to enforce my liability hereunder on any rights set-off or counterclaim that the customer may have against you.

 

4. THIS GUARANTEE shall extend to and be applicable to all sums which may from time to time be due and payable by the customer for goods supplied by you and noit merely to so much of the sums due or payable as equals the limit of my liability hereunder

 

5. THIS GUANTEE shall be binding on my exectutor or Administrators and upion any supervision receiver trustee or other person lawfully acting on my behalf and shall for the benefit of and be enforceable by your successors in title and assigns

 

6. IN THE EVENT of there being provision for mroe than one signature to this guarantee the obligations and liabilities of a person signing this guarantee shall not be construed as being conditional on signature of the guarantee by any one or more of the other proposed signatories and that personal shall be pound forthwith upon signing the same but as between those that do sign their obligations and liabilities shall be construed and have effect as joint and several obligations and liabilities.

 

7. THIS GUARANTEE shall not be affected for impaired in any way by the express of implied discharge from liability of anyone or more of the Sureties.

 

8. THIS GUARANTEE shall be additional to any other Guarantee or security now or hereafter helf by yiou in respect of the total indebtedness of the customer to you and you shall not be obliged to take any action against the customer nor enforce any other security held by you before enforcing this guarantee.

 

9. I reserve the right to revoke this Guarantee upon 14 days notice in writing addressed to the credit manager of 'X' at its head office as to all future dealings by the customer with you after expiry of the notice period PROVIDED THAT such notice is served shall not be deemed to have been served prior to the date which is 6 months following the date hereof:

 

IN WITNESS whereof this deed has been executed

(NO DATE has been written)

 

your further advice is appreciated.

Edited December 19, 2012 by medievil2003