efg loan default

[jaypum]

Hello, i am a company director and have entered into voluntary liquidation due to a lost court case with a large building contractor. Myself and business partner signed an efg loan gaurantee for 120k approx 18 months ago, my ip and accountant have assured us that we are only liable under the scheme for 25% of the loan, however our bank manager told us today that we are liable fro the whole amount, we signed gaurantees last year for 120k each? (which in hind site was mad) but we assumed that the government would cover the first 75% and us the raminder split equally? Can anybody let me know what the outcome of this would be?
Thanks

 

[Billmccallum]

The likely outcome is the bank will chase both directors for as much as they can get, only when that is exhausted will the government guarantee kick in.

 

Unfortunately the bank will chase you first.

Whilst you say you were mad to sign 100% guarantee, the reality is that you probably had no choice. The Government, curiously, chose not to highlight the numerous caveats and high level of red-tape they have tied the EFG in to make it far less attractive than it first appears.

Hopefully somme consolation is that your bank are likely to offer some flexibility on repayment as they have undertaken not to remove people from the family home.

 

[PERCY67]

Hi,

Accountants should stick to doing the numbers not advising on things they don't know about. I received the same advice but looked into it further and he not for the first time was wrong.

You and your co-director are liable for the full amount. Firstly you will receive a default notice, then demand full repayment of the loan. Ensure you account is empty as they will close it.

Then it goes to their collections department, who will ask you to make payments per month, say for the next 10 plus years, then they will pass it over to debt collectors if you refuse.

These loans are a rip off because you will be paying a premium for the BERR to underwrite it.