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FAQs

When facing claims personally it can be a stressful and anxious time.

The most obvious concerns our clients have revolve around what is an acceptable offer and the implications of legal action on credit files, bankruptcy and losing family homes.

What legal action might be taken to enforce a personal claim?

When enforcing a personal guarantee claim or an insolvency claim there are two legal routes which can be taken.

The first is personal bankruptcy. This involves issuing a statutory demand which is served by an agent of the court and provides for 18 days to respond should there be a defence. If no response is received after the expiration of the 18 days the creditor/insolvency practitioner can go on to issue a petition at court. It is at this hearing (usually several months later) that a personal bankruptcy order will be made.

The second route is to go down the County Court Claim route. The initial County Court claim is issued and from date of issue there is 14 days to respond with a defence which then extends the deadline a further 14 days. After that the creditor/insolvency practitioner can then apply for a judgement. Once the judgement is rubber stamped by the court a County Court Judgement will be issued.

What if I just ignore the threats of legal action?

This would be the worst thing you can do. Burying your head in the sand will only make things worse. It’s normal for a creditor to threaten legal action in the first place, however, at this point, they don’t know what if any recovery they will make.¬† ¬†Once we properly present the facts based on your individual financial circumstances you may find legal action is much less attractive to creditors than you may think. Any return is uncertain and can take a long time.

Most creditors take a commercial view and won’t waste money on legal action if there is little or no chance of it achieving something.

How will legal action effect me personally?

Personal bankruptcy means a trustee is tasked with realising all your assets including family homes with a view to covering their own costs and distributing funds proportionally to all your creditors. It also means you cannot be a director of a company for 12 months. The impact to your credit file is severe.

County Court Judgements can be used typically in two ways. Either to appoint bailiffs to realise personal assets to repay the liability or to seek legal charges on assets typically property. Once a charge is achieved the property can be made subject to a forced sale order and sold. CCJs will have a severe impact on your credit file.

How do I avoid legal action? What should I offer?

Valid personal guarantee and insolvency claims are settled based on your own unique personal financial circumstances.

Knowing how to assess your income/expenditure and assets/liabilities and packaging these in a way to allow creditors and insolvency practitioners to make informed decisions on the level of your offer to settle is key.

Producing properly calculated estimated outcome statements in the event of legal action further validate and set the level of offer to be made.

Personal Guarantees UK have a set methodology and approach which is proven to get you the best outcome possible.

Free Initial Consultation on Personal Guarantee and Insolvency claims.

Find out more about:

  • What legal action you could face, the consequences and how to avoid it.
  • Why you will not have to repay the full value of the claim.
  • What is likely to be required to settle your claim.
  • How claims are negotiated, what proposals should contain and how proposals should be presented to achieve sensible affordable settlements.


What have you got to lose? Remove the anxiety and stress caused by facing claims under personal guarantees and claims from your liquidator and call Personal Guarantees UK for a free initial consultation. With over 10 years of experience negotiating claims for directors you will be in safe hands.

REQUEST YOUR FREE INITIAL CONSULTATION.