Banks and other lenders commonly demand personal guarantees before agreeing to business borrowing. This means the company director who signs the guarantee agrees to become personally liable for the debt should the company be unable to pay it.
Whilst a company can make the repayments as and when they are due, therefore servicing the borrowing, then the personal guarantee is of no issue; it simply exists in the background whilst the company pays off the borrowing.
If the company experiences financial problems and becomes insolvent, a serious problem can occur. If any other options are exhausted and the company has to be liquidated, then this will trigger any personal guarantees.
As per the terms of the personal guarantee signed at the time of the borrowing, the responsibility for any outstanding debt now lies with the person or persons who signed the guarantee. More often than not, the liquidation of a company will lead to or be in conjunction with personal financial problems.
The bank or creditor will now ask the director to repay the personally guaranteed borrowing using personal funds. If the director is unable to do this, then they will pursue the director through the legal system, which can lead to the forced sale of assets, including the family home and potentially bankruptcy.
If your company is either in liquidation or it is looking likely that it will be, then don’t hesitate to get in touch with us for help with your personal guarantees.
The first thing we can do for you is to offer you a completely free telephone consultation.
On this call we will cover the following:
- Check the validity of the claim.
- Clarify your current financial position.
- Explain what legal action is possible and likely to be taken against you and its implications.
- What would potentially be acceptable to your creditor(s) as settlement and what our strategy would be to resolve this in the most cost-effective way for yourself.
- Confirm our fees based on our fixed fee structure and the benefit of us negotiating on your behalf.
If after the initial free consultation, we don’t believe we can help you or achieve a better result than you could yourself then we will not take on your case and we will advise you of that.
Personal Guarantees UK has extensive experience in settling these claims for directors, your case will be dealt with by highly qualified professionals giving you peace of mind that an affordable and commercially acceptable deal will be reached with your creditors.
To arrange a convenient time for your free consultation please get in touch on 0333 8801791 / info@personalguaranteesuk.com or fill in the contact form on our website and we will call you.
