Insolvency

peanut

New Member
Feb 28, 2026
1
0
kent
Good evening.
Up until three years ago i owned a successful garage. However, poor health and disabilities forced me into a position where i needed to think of other things, like making it to 60!
I found a buyer, who was keen as mustard, and we started the process of him purchasing the company. Unfortunately, 2 months before we were due to actually start the signing and hand over, he was diagnosed with terminal cancer (yes, that did happen) and pulled out. I was at a point where i really couldn't continue, and found someone who would purchase the equipment, stock etc, and take over the lease. We had, or so we thought, a directors loan equating to £60 left to pay us from when we installed an mot bay. The loan was against all assets.
so, after a year of messing around between myself, the landlord and land registry, the deal went through.
I decided to fold the company, as there was no way the buyer would get that for the money he paid. I paid £3.5k for a company to do the voluntary insolvency.
(sorry, yes i did feel i needed to give the backstory)
I have just been informed by the liquidator, that the directors loan had not been registered with companies house or hmrc, so is there fore invalid (thanks accountants!!).
He states that out of the money that i received for the equipment (not the lease) he will be putting a £35k charge against me, as i sold the equipment and used the money to pay myself before other creditors (preferential payments).
I informed him that as i used over £26k of that money to pay rent, solicitors fees and bank overdraught, that should be taken into consideration. These were things that had a directors guarantee.
He is adamant that i need to make an offer close to the 35k mark, and to top it all, he has only now informed me that 12k of the debt is their time, even though i paid upfront with no warning of extra charges.
I'm not even sure what my question here is, but is this all normal? I would have thought that debts with a personal guarantee would be amongst the first to be settled, and if i hadn't paid the rent, the landlord would have taken possession of the building and contents, leaving nothing to be sold.
I dont know what to do.
 

Newchodge

Moderator
  • Business Listing
    Nov 8, 2012
    22,631
    8
    7,947
    Newcastle
    Good evening.
    Up until three years ago i owned a successful garage. However, poor health and disabilities forced me into a position where i needed to think of other things, like making it to 60!
    I found a buyer, who was keen as mustard, and we started the process of him purchasing the company. Unfortunately, 2 months before we were due to actually start the signing and hand over, he was diagnosed with terminal cancer (yes, that did happen) and pulled out. I was at a point where i really couldn't continue, and found someone who would purchase the equipment, stock etc, and take over the lease. We had, or so we thought, a directors loan equating to £60 left to pay us from when we installed an mot bay. The loan was against all assets.
    so, after a year of messing around between myself, the landlord and land registry, the deal went through.
    I decided to fold the company, as there was no way the buyer would get that for the money he paid. I paid £3.5k for a company to do the voluntary insolvency.
    (sorry, yes i did feel i needed to give the backstory)
    I have just been informed by the liquidator, that the directors loan had not been registered with companies house or hmrc, so is there fore invalid (thanks accountants!!).
    He states that out of the money that i received for the equipment (not the lease) he will be putting a £35k charge against me, as i sold the equipment and used the money to pay myself before other creditors (preferential payments).
    I informed him that as i used over £26k of that money to pay rent, solicitors fees and bank overdraught, that should be taken into consideration. These were things that had a directors guarantee.
    He is adamant that i need to make an offer close to the 35k mark, and to top it all, he has only now informed me that 12k of the debt is their time, even though i paid upfront with no warning of extra charges.
    I'm not even sure what my question here is, but is this all normal? I would have thought that debts with a personal guarantee would be amongst the first to be settled, and if i hadn't paid the rent, the landlord would have taken possession of the building and contents, leaving nothing to be sold.
    I dont know what to do.
    If you had not paid the creditors who held personal guarantees you would have been personally liable to pay, so by paying them first you have, effectively, paid yourself so it is preferential.

    You mention the loan was not registered. Did you have an accountant then and did they advise about the loan? You may be able to go after them.

    For the liquidator's bill, please read your contract with them. You may be able to challenge the additional charges.
     
    Upvote 0

    Karimbo

    Free Member
  • Nov 5, 2011
    2,697
    1
    353
    A directors loan is like the most simplest thing to record. Inuse freeagent and I can directly post out of pocket expenses or if I pay money into the business I can record it as money received from user. It shows up on balance sheet.

    Is there more to it? does a formal document need to be filed at companies house acknowledging it?

    Pretty hard to imagine an accountant would bungle a simple bookkeeping issue. The only way I think an accountant would miss this is if the accountant wasn't told. Assets were purchased from personal accounts and invoices weren't logged in.
     
    Upvote 0

    Lisa Thomas

    Business Member
    Business Listing
    Apr 20, 2015
    5,439
    1
    1,441
    www.parkerandrews.co.uk
    I wonder if the 'registration' you are referring to, is actually a debenture. Had a legal debenture been drawn up and registered with companies house BEFORE any funds were advanced, then that would have given you some priority as a secured creditor, ranking above the unsecured creditors (but not the prescribed Part)

    However the preferential creditors (HMRC for VAT and PAYE and some monies paid to employees for wages and holiday) would still have ranked above you.

    Here, it wounds like you treated yourself preferentially. I.E you paid yourself back while other creditors were left unpaid.

    Ideally you need to negotiate a deal with the liquidators using a specialist insolvency solicitor. I can recommend one if you want to dm me.
     
    Upvote 0

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