Personal Guarantees on Loan

[PDM31]

Hi

My current situation is this. I personally signed a guarantee for 3 business loans a couple of years ago. That company has now gone into liquidation and i'm on the hook for them.

There are two loans totalling £198,000 with Funding Circle and one overdraft I had with HSBC for £50,000. I've not made any payments for around 12 months to either one now as I've not had a regular income. Another business i started has failed and i'm currently waiting for my DBS check to come back to become a taxi driver.

I don't have any assets. Funding Circle are asking me to agree to £20 a month for now until my financial situation improves however trying to pay back £240,000 worth of debt on a taxi driver's salary is going to take a long time.

Funding Circle have said if i don't sign this agreement for the £20 then they are going to commence legal proceedings against me. I assume the worst case scenario for me is that they force me into bankruptcy and they pay? At the moment i can't even afford the £650 cost to do it myself.

Should i let Funding Circle commence legal proceedings or sign the agreement, and pay £20 a month until i start taxi work and can afford to go bankrupt myself?

 

[Mr D]

Bankruptcy would get rid of the £240k of debt. May as well save £650 by letting them do what you are after.

 

[Lisa Thomas]

Bankruptcy does sound like it might be the right option for you but you should seek formal advice first.

Try here:

https://www.stepchange.org/contact-us.aspx

 

[PDM31]

Bankruptcy does sound like it might be the right option for you but you should seek formal advice first.

Try here:

https://www.stepchange.org/contact-us.aspx

Thanks Lisa, i've spoken to them and others over the last 2 years. They basically advised to try and negotiate with the creditors or file for bankruptcy. HSBC are easy to deal with than Funding Circle and i think i should be able to get a large reduction on the settlement.

Funding Circle however have said the minimum i can settle for is £118k payable within 30 days.
Not happening when i've got nothing in the bank and no regular income.

When they start formal proceedings how long do you think it would take for them to file for bankruptcy?

 

[Lisa Thomas]

I'm afraid that's a case of 'how long is a piece of string'. They might not even make you Bankrupt - it will cost them a few thousand £ to do it with the likelihood of no recovery.

 

[PDM31]

I did ask them what "legal proceedings" meant because they know i don't have assets or regular income and he replied and said we would indeed look to commence bankruptcy proceedings however this is a last resort and wish you enter a payment plan of £20 a month for the next 4 months then revisit then.

 

[Mr D]

I did ask them what "legal proceedings" meant because they know i don't have assets or regular income and he replied and said we would indeed look to commence bankruptcy proceedings however this is a last resort and wish you enter a payment plan of £20 a month for the next 4 months then revisit then.

Counteroffer with £1 a month for 4 months.

 

[PDM31]

Counteroffer with £1 a month for 4 months.

Just delaying the inevitable though isn't it. Spoke to taxi company and bankruptcy won't affect me getting a settle car or insurance so i might aswell get it over and done with now so I can start putting it all behind. My own doing and i take full responsibility but it's been two years from hell and i'm probably only still here writing this because i've got two kids.