personal guarantees following Voluntary liquidation

[eno]

Some advice please if you will. Our company went into liquidation about 5 months ago and is still going through the process. We have started a new company but at present my I work from home in Scotland and my husband works in the business in England and comes home at weekends. We desperately need to move but we are stuck as we wont get a mortgage on 6 months trading. We had an overdraft of 40k ish with a personal guarantee attached but we also had a loan for machinery also with a personal guarantee. The liquidator had 3 offers to buy the machine and approached the finance company but despite their best efforts, the finance company never got back to them to give them the go ahead to sell the machine. So 3 things really, can they really expect us to stump up for a shortfall when they would not reply to the liquidators offers? How do we handle the bank, and any suggestion how our family can be reunited with its husband and father i.e when could we apply for the mortgage and if we sell will we have to hand over the equity to the bank?

 

[Spongebob]

How much equity do you have in your house?

Does the bank have a charge over your house, or did you just sign a personal guarantee? If the latter, is the guarantee in both your names? Was the guarantee entered into under Scottish or English law?

Who is your current mortgage with? (Please tell us that it isn't the same bank that has your guarantee!) Are your payments completely up to date?

I suspect that you will not be in a position to buy another house any time soon. If you really need to move however, what's wrong with renting? Your bigger problem is going to be keeping hold of any equity there may be in your current home.

 

[lovingthesurf]

Hi ,
Sorry to hear of your situation but be assured you will be ok at the end .
Who has ownership of machinery at the moment ? Did your old company own it with you as guarantor ?
As for the bank guarantee with the overdraft , depending on which bank it is , you may be able to "haggle" to clear this ? Once they start asking for it , just start stating your current situation and offer a final settlement of say something silly of £3k to see if they will accept . I had a personal guarantee on a 10k overrdraft and when our company went into liquidation we paid £900 and I have not heard anything since ( over 5 years ago ) , so fingers crossed there .
I also had a perosnal loan which was handed over to a debt collection agency ( 11.5k) , they have been very good and over the last 3 years i have eventually paid it off ( no interest !! )

 

[eno]

Thank you for your kind responses. First of all the company was registered in Scotland,the guarantee is in both our names and the bank does not have a charge on the house. Yes the mortgage lender was our business bank as we had to change our mortgage to them after rather than give us a loan they suggested we add it to our mortgage. As for the machinery, the company owned it and my husband personally guaranteed the finance. The bank was RBS!!!

 

[wshouse]

Hi,
We have just ceased trading two weeks ago and have 90k in personal guarnateeson overdraught, we are owed 1.4 mill in so would like to think both liquidator fees and bank 90k will be covered, howevr bank have called in their exposure straight away! any advice on how to stall?

 

[Spongebob]

Hi,
We have just ceased trading two weeks ago and have 90k in personal guarnateeson overdraught, we are owed 1.4 mill in so would like to think both liquidator fees and bank 90k will be covered, howevr bank have called in their exposure straight away! any advice on how to stall?

Have you called in a liquidator yet?

If not, my advice would be to start collecting as much money from your debtors as quickly as you possibly can. Offer enormous discounts if necessary - just get 90k in this week!

 

[wshouse]

Yes, however they are not officially appointed till march 27th
have been chasing money, consolodated effort this week, funny how doors shut though even for hefty discounts!

 

[wshouse]

please advise anyone out there,
we have appointed IPs who I have been pleased with and have worked well with us chasing money and building commmunications up with debtors, someofthe major creditors have sent proxys stating other IPs, in some cases more than the value potentially of our existing, is there anyway of preventing them being appointed?
if they total less than half ofthe total debt or non returned proxys can they still be appointed if they are the most?
i do feel that appointing someone else would negative, am i wrong in thinking this?

 

[eno]

can anyone tell me how long the banks take to come after their money? It is 7 months since the company went down and we havent heard a peep

 

[lovingthesurf]

Normally pretty quick ? I would have expected that you would have heard within a month or 2 at latest .
Keep us posted on this it is always interesting to hear how these things pan out .

 

[eno]

We heard from the bank at the weekend and now I know why it has taken so long. The letter said we had 14 days to reply and that we had ignored the previous letter !!! Reason being that it is difficult to read a previous letter if it was sent to an address that we lived in almost 3 years ago. Now, they clearly have our new address so I am now wondering if this was a ploy to put pressure on but also to slap interest on ( which they evidently have given that the 45k has now risen to 47k). I am absolutely horrified that they didnt send this first letter by recorded delivery, given the highly confidential nature and the money involved. If they had done it would have been obvious that we didnt live there. We are going to write back to them requesting a copy of the guarantee and a breakdown of the sum (liquidator hasnt even concluded his affairs yet so that sum could be less) is there anything else anyone would advise us to do next?
Talked to a guy last week who suggested we set up a trust deed (as we live in Scotland) and talked about IVA being the only way forward, also said that despite the fact the guarantee was not linked to the house, the bank could go to court and change that (dont want to do this as we have a new business which surely would be compromised if we did this). Perhaps I am being a bit naive but I thought if we could sell the house we could just make and offer of about 20k to the bank and that would get rid of them as the alternative would be very small amounts over a long period (as we have no money) Again any advice would be extremely welcome.

 

[lovingthesurf]

hi ,
I guess what you should do is plead poverty to the bank and send a detailed letter of your income / expenditure . Then make a single and final offer to clear this based on whatever money you can get your hands on ( relative etc .. ) Start stupidly low , say £3000 as it is all you have and even that is putting you into further debt with your relatives .
If they say no ( try a little higher ) then depending on which bank you go with they will send to a debt agency ( probably credit solutions ) these guys are pretty good as long as you keep up payments but you will need to start at a stupidly low monthly installment , do a direct debit with them as they do hassle if you miss payments .
Good luck and keep us all informed

 

[eno]

The other aspect that I didnt mention is that we really could do with selling up anyway as our new business is 200 miles away and our daughter is in second year at secondary school so we need to do this pretty quick. My worry is that i think there is potentially about 5Ok plus equity in the house (there would have been more if the bank had not suggested (strongly) that we take out an advance on our mortgage rather than them give us a loan) and if we sell then the bank are going to demand all of the equity but we need to live!!! and we need to have money for moving costs so how do tackle this? I am guessing that getting a full and final settlement before we sell the house would be good but it is catch 22 as we would only have that money if we sold the house!!!

 

[eno]

How much equity do you have in your house?

Does the bank have a charge over your house, or did you just sign a personal guarantee? If the latter, is the guarantee in both your names? Was the guarantee entered into under Scottish or English law?

Who is your current mortgage with? (Please tell us that it isn't the same bank that has your guarantee!) Are your payments completely up to date?

I suspect that you will not be in a position to buy another house any time soon. If you really need to move however, what's wrong with renting? Your bigger problem is going to be keeping hold of any equity there may be in your current home.

Spongebob, I replied to your post but then someone else started asking about their own situation and there was no response. I would really welcome any further advice you may offer following on from this post, Many thanks

 

[boaty]

The trust deed option might not be the best for you if you are still a company director as it's a form of insolvency and you can't be a director while it's in force. A Debt Arrangement Scheme might be a better option. You pay back the full amount, but charges and interest are frozen. The payments get handled by an administrator, so you don't get the threatening phone calls and letters. There's a useful calculator at wearedebtexperts.com which shows you relevant options and gives an indication of the monthly cost.

As for moving, as others have said, it may be difficult to get another mortgage and if the lender you are in dispute with is the same as your mortgage lender, that might make it difficult. Plus you probably want to try and hang on to your equity. It might be worth looking at renting a property nearer your new business and renting out your existing place until such times as your situation improves and you can look at selling up. If nothing else you get to keep a (hopefully) appreciating asset. Hope the above helps!

 

[Nadcom Solutions]

please advise anyone out there,
we have appointed IPs who I have been pleased with and have worked well with us chasing money and building commmunications up with debtors, someofthe major creditors have sent proxys stating other IPs, in some cases more than the value potentially of our existing, is there anyway of preventing them being appointed?
if they total less than half ofthe total debt or non returned proxys can they still be appointed if they are the most?
i do feel that appointing someone else would negative, am i wrong in thinking this?

I had a client in a similar position who was desperate they would all fob him off on the phone so he ended up driving to all his debtors with two friends and got 99% of the cash he was owed.

 

[eno]

I had a client in a similar position who was desperate they would all fob him off on the phone so he ended up driving to all his debtors with two friends and got 99% of the cash he was owed.

I assume the two friends were rather hefty gentlemen!!!!!

 

[eno]

The trust deed option might not be the best for you if you are still a company director as it's a form of insolvency and you can't be a director while it's in force. A Debt Arrangement Scheme might be a better option. You pay back the full amount, but charges and interest are frozen. The payments get handled by an administrator, so you don't get the threatening phone calls and letters. There's a useful calculator at wearedebtexperts.com which shows you relevant options and gives an indication of the monthly cost.

As for moving, as others have said, it may be difficult to get another mortgage and if the lender you are in dispute with is the same as your mortgage lender, that might make it difficult. Plus you probably want to try and hang on to your equity. It might be worth looking at renting a property nearer your new business and renting out your existing place until such times as your situation improves and you can look at selling up. If nothing else you get to keep a (hopefully) appreciating asset. Hope the above helps!

We didnt envisage us getting another mortgage and we are ok with renting. Problem with renting out our place is that the rentable value is far less than the monthly mortgage payments, however I do hear that RBS are one of the most flexible banks regarding consent to let mortgages. That said of course they will refuse because if they get a whiff of us having to move then surely they will refuse a consent to let wont they? So you dont think we could offer them say half the money to get shot of the debt?