Director's loan

[misshillson]

Hi can anyone help please. My husband had a limited company and accrued a director's loan which I knew nothing about. I was Company Secretary, but on paper only, I had no dealings with company. He passed away in 2008 and now the liquidators want me to repay the £25K loan. I can't pay, so what happens. Any ideas please as this is really distressing me. Thank you.

 

[K2012]

That is 25,000 that he had borrowed from the company, why did he not take it as a dividend?

I am sure a good accountant will be here to help soon - sorry to hear of this situation.

K

 

[misshillson]

thank you kevin. don't know anything about dividends!!!! As you can see I'm not business minded!!! Hopefully someone out there will have some answers.
thank you.

 

[Tom McClelland]

You *may* be better asking this question in the Legal forum.

As I understand the situation....

Your husband's debts don't pass to anyone else.

But they formed part of his estate when he died. So if he left any money or property that should have been used to pay off his debts before anything got distributed to his heirs. Paying off a director's loan owed to a ltd company would come under that heading, I would have thought.

I suspect that you need legal advice if the liquidators of a company that he owned are coming after you for the money that he borrowed from that company, particularly if you have any property of your own, or if he left any property to you.

 

[kontracta_com]

Yeah I'd agree that it's one for a lawyer.

The basic position is that nobody else has to pay for debts incurred by a deceased person unless they are also liable under the terms of the original agreement such as if they have acted as a guarantor. However I'm not a lawyer so please don't rely too much on what I say here.

It's best to go straight to a solicitor if you feel as if you are being hassled and they can look at the matter for you. It sounds as if it would be worth the cost.

I'm not sure whether they would be much good but in the interim you could also ring the Citizens Advice Bureau - who may be able to at the very least pass you on to someone more experienced in this area.

Good luck.

 

[Tom McClelland]

The basic position is that nobody else has to pay for debts incurred by a deceased person unless they are also liable under the terms of the original agreement such as if they have acted as a guarantor. However I'm not a lawyer so please don't rely too much on what I say here.

I'm not a lawyer either, but I've come across a couple of similar situations in the past. I think the OP needs to be slightly careful, they may not be home free even if the original debt wasn't in any way guaranteed by them, because the estate of the deceased should have paid the debt if the deceased had any property. For example even if there was no money or other property left in the will the family home may have been partially or fully in the name of the deceased. When you get probate you're supposed to honour the debts of the deceased first, before making any legacy distributions, I think. Definitely get proper legal advice.

 

[Advisor1]

Hi can anyone help please. My husband had a limited company and accrued a director's loan which I knew nothing about. I was Company Secretary, but on paper only, I had no dealings with company. He passed away in 2008 and now the liquidators want me to repay the £25K loan. I can't pay, so what happens. Any ideas please as this is really distressing me. Thank you.

stokes-solicitors.co.uk will give you some initial free advice over the phone

They are used to dealing with this type of thing