Personal Guarantee on Business Overdraft

[onlineshop1]

We're in the process of ceasing trading and i'm conscious that as a Director I personally guaranteed the company overdraft for £10k. As you'd expect we're running at the maximum -£10k and with closing down this means we're liable for this debt...

But are we liable? Does anyone have any suggestions on how we might get out of paying the £10k? I've heard some stories of businesses collapsing and doing a deal with the bank to pay back way less than what's owed on the basis that they simply cannot afford to pay back.

So far we've phoned the bank, they've frozen the account so it doesn't build up any further charges and the account is no longer functional. We've discussed a £100 payment per month to keep them happy.

Any advice, plans or opinions appreciated.

Thanks in advance.

 

[PaulThompson]

Can't help but if you don't repay (even with agreement not to) this might effect your ability to borrow in the future... might not be catastrophic but you do need to know this.

 

[Big G]

Yes you are liable as you signed a personal guarantee, banks and other companies have these so that should worse come to worse with the ltd company they can reclaim the money from the director(s).

They may accept installment payments to clear but if you have assets such as property then they may just go for a charge against it or even repossession proceedings in order to recover the monies a lot quicker.

 

[UK Contractor Accountant]

First thing to do is to ask the bank for a copy of the signed gaurantee to see if it is valid. I have known them to go missing in the bank records before and not witnessed correctly.