What legal steps does one need to take to enforce a personal guarantee over a defaulting borrower?

[LucindaBirmingham]

I loaned thousands of pounds to a UK business, a Limited Company, a few years ago in the form of a loan note (also known as mini-bond). To protect my investment, as well as a legal charge on the business, I got a Personal Guarantee from the Director. He has considerable assets, worth many millions of pounds (verified in writing from his accountancy firm).

The arrangement was I would receive monthly interest payments and get my full capital back after two years.

To cut a very long story short, the Director started defaulting on his payments over a year ago. I've chased him up, through every means possible, a thousand times, but he hasn't paid a penny in interest, nor has he returned my capital. 

A couple of weeks ago the Company went into liquidation. This is due to the debts it has to multiple lenders. Having experienced these situations before, the liquidation/administration process is likely to drag on for years and I'm unlikely to get anything back.

Therefore, I wish to enforce the personal guarantee I have. However, I've never had to do that before. I've Googled phrases like "enforce personal guarantee" and various variations of that phrase, but the majority of webpages that appear in the search results guide borrowers on how to wriggle out of their personal guarantee liabilities. It's made me quite worried. I can't find anything much in terms of how to enforce a personal guarantee.

I imagine I could hire a legal firm, but my experience of lawyers hasn't been great in the past and don't want to pay them thousands of pounds at their hefty hourly rates if I can avoid it. However, if that is the only/best option, I'm willing to take the hit and would appreciate any recommendations of who I may contact.

The Insolvency Service told me I may be able serve a statutory demand myself, so I'm wondering if that's a route I should take. I'm not sure if that's the first formal step one should take (subsequent to sending formal demand letters, which I've done) towards enforcing a personal guarantee?

Also, I have grown to discover the Director in question is a very devious and slippery character and if I go it alone, I'm wondering if it'll put me in a weak position and much more likely to fail in my quest to get my money back?

Another option I've considered is a debt collection firm - or a law firm - that may be able to take my case on a 'no win no fee' basis. Do they take on cases like mine? If so, do you have any recommendations of firms please? Feel free to DM me if you're not allowed to make any suggestions publicly on these forums.

I'd very much welcome any guidance you may offer as I'm quite lost. The borrower has been making a fool of me for over a year and this long-standing situation is continuing to cause me infinite distress.

Thanks very much in advance.

[LucindaBirmingham]

Somebody has been owing me money for more than a year now. I made the loan to him via a Loan Note (Mini Bond).

 

I have chased him up for the money dozens of times, but he has used every trick possible to give me my money back.

I need to enforce the Personal Guarantee he gave me now.

Does anybody know any proactive and effective debt collection or law firms that may be able to take on my case on a 'no win no fee' basis please? That would save me paying on an hourly rate, at hundreds of pounds an hour to a legal firm.

Many thanks. 

[mantis shrimp]

but you will get to keep less of your winnings (if you win). Do you understand that? 

 

Speak to people you trust, ask for recommendations in your area. 

 

Failing that, contact the Law Society. 

[unclebulgaria67]

This site would not allow any recommendations for Solicitors or Debt Collectors to be posted.

 

If you can issue a County Court claim, you can do this yourself.  It is whether the debtor would settle any CCJ.

 

How much does this person owe you ?

 

Did you get the personal guarantee agreement drawn up properly with any legal advice.  Was it a witnessed agreement ?

[mantis shrimp]

You probably need to make formal demand for payment under the guarantee.

 

Do you understand that when a company becomes insolvent, its directors are often financially stressed? This can affect ability to pay. 

 

Consult the lawyer who prepared the document. 

Edited June 18, 2022 by mantis shrimp

[mantis shrimp]

see the OP's other thread, Uncle B. 

[dx100uk]

Threads merged.

 

go get a ccj you have a signed personal guarantee, then when you win send in the HCEO's. Everything else is useless.

 

Dx

[unclebulgaria67]

OK, if you looked to try to make the debtor bankrupt, where do you think you will be in the line up of creditors trying to recover money ?

 

And is it worth the cost, if you had to go to Court ?  Of course you can issue a statutory demand as a way of applying pressure, but don't you think the debtor will realise that it is an empty threat because you won't continue the process ?

 

I would think gaining a CCJ would be first step.

 

 

[mantis shrimp]

There is something to be said for a statutory demand, as long as all the requirements for liability under the terms of the guarantee are in place. A statutory demand is relatively cheap. It can shake out money if it is there to be shaken out. If it does not produce the money or an acceptable arrangement, then the creditor can review whether to take the next step or not. 

 

The OP has said the claim is for "thousands of pounds". The court fee to start a claim may be substantial, and the case may even be one that is allocated to the Fast Track, or even the Multi-Track. 

 

 

[Ethel Street]

@LucindaBirminghamCan you give us an idea of how much money you are owed (capital + unpaid interest)?