Statutory Demand letter Personal Guarantee

[KrisP]

Evening all

Following on from my previous post and the advice therein.

I have received a stat demand in the post from one of the creditors for a ltd company I am director off that is going through liquidation as we speak.

They have called a few times while I was in hospital but I have not had anything prior to this.

Can anyone let me know the process from here on and timeframes and possibility to negotiate etc .. my concern is of course any effect on my personal credit report due to other businesses and buy to let borrow ability and of course any issues for my personal home

I have buytolet properties that I am willing to offer as security and a monthly payment in the interim until either the property is sold when renovation is finished or refinancing is achieved.

Thanks in advance for any advice

 

[ChrisCallaghan]

Hi,

Short answer is that you need to speak with them ASAP. If they've issued a Statutory Demand, this is likely a prelude to the creditor petitioning for your personal bankruptcy.

For more background, see https://www.citizensadvice.org.uk/d...ditor-has-sent-a-statutory-demand-bankruptcy/

If you feel you are unable to negotiate with this creditor without assistance, I would suggest seeking advice from a debt charity or an insolvency practice that offers personal debt advice and solutions.

 

[KrisP]

Hi Chris

Hope you’re well

I will be contacting them Tuesday but have been unable to due to my wife giving birth at 37 weeks and not being home to see the letter ..

I would hope wiht other assets and the ability to pay 25% of the balance instantly , this may stave off this actioN

Along with a voluntary charge on a mortgage free rental property of mine

Thanks again
Kris

 

[ChrisCallaghan]

Hi Chris

Hope you’re well

I will be contacting them Tuesday but have been unable to due to my wife giving birth at 37 weeks and not being home to see the letter ..

I would hope wiht other assets and the ability to pay 25% of the balance instantly , this may stave off this actioN

Along with a voluntary charge on a mortgage free rental property of mine

Thanks again
Kris

Hi Kris,

Likewise I hope you, wife and baby are all doing well.

I'm on annual leave for a week and a bit, but should you need a recommendation for an insolvency practice for the personal side of things, let me know and I'll email you the details.

 

[KrisP]

Hi Kris,

Likewise I hope you, wife and baby are all doing well.

I'm on annual leave for a week and a bit, but should you need a recommendation for an insolvency practice for the personal side of things, let me know and I'll email you the details.

Hi Chris

I really appreciate the time taken to answer.. Hope you have a good time away

I have a personal guarantee specialist called Julian Donnelly who I have instructed but would gladly pay more to get more help if you have someone you recommend.

I can pay these all substantial monthly payments and then near to full balances in time once the rental properties are refinanced or sold so I would assume this would be preferred to bankruptcy etc by the creditors too

 

[Gyumri]

I have received a stat demand in the post from one of the creditors for a ltd company I am director off that is going through liquidation as we speak.

How does that concern you personally then? If the stat demand is from a creditor of the company then it's not your concern, especially if the company has gone into liquidation.

 

[KrisP]

How does that concern you personally then? If the stat demand is from a creditor of the company then it's not your concern, especially if the company has gone into liquidation.

It’s unfortunately been served to me as director and with the debt having had a personal guarantee attached

 

[Gyumri]

A stat demand can only be served if the debt is for a liquidated or undisputed sum. If it's as clear as a whistle that the debt is due from you as the guarantor then as suggested above you need to start talking to the creditor to try and resolve the position.

 

[KrisP]

A stat demand can only be served if the debt is for a liquidated or undisputed sum. If it's as clear as a whistle that the debt is due from you as the guarantor then as suggested above you need to start talking to the creditor to try and resolve the position.

Hi thank you for this

I think it’s fallen due as the company has failed to pay the creditor and this comes as one of the conditions

I’m more than happy to pay over time or pay an amount over time until a property sells, can even pay a larger percentage now while they wait for this, just haven’t dealt with this before and wanted to be sure they wouldn’t take home or make bankrupt if there were other options available

Thansk again for time taken to answer .. really is appreciated

 

[Gyumri]

If you deal with the creditor and pay reasonable installments then they are not likely to want to petition for your bankruptcy as that will only benefit your other creditors as well and the petitioner will get nothing!

If they don't play ball then you can apply to set aside the stat demand provided that is done within 18 days or if the time has lapsed then it will still take another year for the matter to be heard by a bankruptcy court by which time most if not all of the debt would have been paid off?

A bankruptcy judge is not bound to make you bankrupt if you can show that within a reasonable time you will have cleared the debt.

Another option is to offer the creditor a charge on your property so that should shut them up while you take steps to sell it.

 

[KrisP]

Again thank you so much for your reply.. it is more appreciated than you will know

It has been well within the 18 days, I will ask for the judgement to be set aside but unsure on what grounds, although we are disputing the amount as we returned assets for them to sell which they have at a reduced price and shown us no proof of these sales .. I’m hoping this will then give me time to discuss with them to have an amicable agreement on the money and time

I can clear it in 24/36 months or as stated pay 20-25% off immediately and the rest over time whilst secured against a buy to let property of mine

Again thank you for the time taken to reply .. god bless you

 

[Gyumri]

I will ask for the judgement to be set aside but unsure on what grounds, although we are disputing the amount as we returned assets for them to sell which they have at a reduced price and shown us no proof of these sales ..

Hi - if the creditor has a judgment then there would be no need to serve a statutory demand as the judgment is itself evidence of a liquidated sum.

You can apply to set aside the stat demand for the reason you have given and that can be done via email to the court but it would be much simpler for the creditor to agree in writing to withdraw the stat demand and accept instalments to clear off the debt.

otherwise if you apply to set aside the stat demand the creditor is going to have to wait a year anyway for that hearing to be heard and if there is a genuine dispute over the debt (which there can't be if the creditor actually has a court judgment) then the stat demand will be set aside by the court.

It sounds like however that there is no court judgment against the company that the creditor can rely on and are using the stat demand route to simply pressurise you into coughing up what the company owes.

If there is a dispute over the exact sum then they should not be using the stat demand route as that would be an abuse of process.

What they should be doing is suing you as part of a normal claim.

Under the terms of the guarantee the creditor ought to have served a default notice and if that hasn't been served then they would not be able to demand payment from you anyway!

In a nutshell start making reasonable payments to the creditor that you can afford without busting a gut and start talking to them at the same time.

Creditors soon quieten down when they begin to see the colour of their money!

 

[KrisP]

Hi - if the creditor has a judgment then there would be no need to serve a statutory demand as the judgment is itself evidence of a liquidated sum.

You can apply to set aside the stat demand for the reason you have given and that can be done via email to the court but it would be much simpler for the creditor to agree in writing to withdraw the stat demand and accept instalments to clear off the debt.

otherwise if you apply to set aside the stat demand the creditor is going to have to wait a year anyway for that hearing to be heard and if there is a genuine dispute over the debt (which there can't be if the creditor actually has a court judgment) then the stat demand will be set aside by the court.

It sounds like however that there is no court judgment against the company that the creditor can rely on and are using the stat demand route to simply pressurise you into coughing up what the company owes.

If there is a dispute over the exact sum then they should not be using the stat demand route as that would be an abuse of process.

What they should be doing is suing you as part of a normal claim.

Under the terms of the guarantee the creditor ought to have served a default notice and if that hasn't been served then they would not be able to demand payment from you anyway!

In a nutshell start making reasonable payments to the creditor that you can afford without busting a gut and start talking to them at the same time.

Creditors soon quieten down when they begin to see the colour of their money!

Again thank you for the reply to this and the level of detail and time given .. it really is massively appreciated

There isn’t a judgement you’re correct, that’s a mistake on my part, I was meaning to say have the stat demand set aside ..

I have emailed them to discuss tomorrow a plan with regards to payments in the interim while I sell one of rental properties or refinance for funds

I will ask that they have this set aside in the interim and will offer them a lump
Sum to show eagerness to do so

Again thankyou very much for your help with this

 

[Chris Ashdown]

Are there any other creditors if so you could possibly be giving preference which may be illegal

 

[KrisP]

Are there any other creditors if so you could possibly be giving preference which may be illegal

Hi Chris
Thanks for this
There are two other large ones with PG’s
However the money being paid here is personal money subsequent to the company being liquidated so no preferential creditor payments

 

[Gyumri]

I was meaning to say have the stat demand set aside ..

All they need to do is to write to you to say that they are withdrawing it - which is no doubt what you mean.

I would also clear up the dispute over the actual debt - set-off etc - and then arrange regular but affordable repayments.

All the best.

 

[hazeleigh]

Evening all

Following on from my previous post and the advice therein.

I have received a stat demand in the post from one of the creditors for a ltd company I am director off that is going through liquidation as we speak.

They have called a few times while I was in hospital but I have not had anything prior to this.

Can anyone let me know the process from here on and timeframes and possibility to negotiate etc .. my concern is of course any effect on my personal credit report due to other businesses and buy to let borrow ability and of course any issues for my personal home

I have buytolet properties that I am willing to offer as security and a monthly payment in the interim until either the property is sold when renovation is finished or refinancing is achieved.

Thanks in advance for any advice

If you don't repay the debt in full or come to some other arrangement within 21 days of the demand being served on you, your creditor can apply to make you bankrupt, unless the demand is cancelled or set aside.

 

[KrisP]

All they need to do is to write to you to say that they are withdrawing it - which is no doubt what you mean.

I would also clear up the dispute over the actual debt - set-off etc - and then arrange regular but affordable repayments.

All the best.

I have made contact with them today and will call tomorrow, I’ll offer them a percentage now to withdraw the stat demand and then agree a payment plan…

My thinking was an amount that would mean it would be paid off over 48 months, but agree to pay in full once rental property is refinanced or sold (within 24 months)
I would think is more amenable/acceptable than 90% of debtors they are dealing with currently

Thanks again for your time to message, cannot stress enough how much this is appreciated

 

[KrisP]

Just as an update
Creditor spoken to today, stat demand set aside as we agreed a payment plan over 12 months with balance paid at 12 months

Thank you all for your help with this

 

[Gyumri]

Excellent. Thank you for posting the update.

 

[KrisP]

Anytime
Really appreciate all the time taken on weekend to inform .. made the interim period while they were uncontactable considerably easier to deal with

Thanks ahian
Have a great week

 

[Lisa Thomas]

Just as an update
Creditor spoken to today, stat demand set aside as we agreed a payment plan over 12 months with balance paid at 12 months

Thank you all for your help with this

Good news. Thanks for updating us.

 

[KrisP]

Thanks lisa .. theres still more to be done , but a lesson learned , albeit a very expensive one

 

[Lisa Thomas]

Unfortunately, they often are expensive lessons!

 

[Chris Ashdown]

I must admit that over the years this forum has potentially saved me a lot of money or heartache learning from others mistakes in life. and being given freely as well.

 

[KrisP]

It has in my short time on here been invaluable .. for advice, contacts and reassurance more than anything

All of thr above is always appreciated