Personal Guarantees
Creditors of a limited company can only claim their debts from the company which means that if the company is unable to pay its creditors then the creditors are left unpaid. Some creditors e.g. banks, finance providers and Landlords may not be willing to provide credit to a company without the company’s directors also agreeing to personally guarantee they will pay these creditors if the company fails to pay them.
A formal insolvency process such as Liquidation or Administration is likely to mean that creditors whose debts are personally guaranteed can take immediate action against the guarantors to claim repayment of their debts.
If you are concerned about personally guaranteed debts call now and speak in confidence to a member of our team. We will give you straightforward confidential advice and help you make the decisions which are right for you.
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Client Story
Shirley and her husband were involved as partners in the purchase of a potential development with another couple. Unfortunately part way through the development the relationship between the 2 couples broke down and Shirley and her husband decided to exit the deal and hand over their share to the other party. This resulted in action taken against Shirley’s husband and he chose to petition for Bankruptcy. At the time no action was taken against Shirley. However, some years later the other party issued a writ against Shirley and entered into a Deed of compromise to repay of £57,000 the debt by monthly repayments. Shirley’s sought advice from The Business Debt Advisor team on Shirley’s behalf. Shirley’s health had been seriously effected by a bout of cancer and the stress of the debt was effecting her recovery. As Shirley and her husband lived in rented accommodation and had minimal assets, it was clear that bankruptcy was really the only sensible option. The Business Debt Advisor team helped Shirley pull together financial information on her assets which were minimal plus her debts and income and expenditure. We helped her complete her bankruptcy application online and her husband who was still working, helped out with the application fee of £680. Within days Shirley was bankrupt and her experience of dealing with the Official Receiver was very positive. They agreed with her that she would affordable pay income contributions of £210 per month for a 3 year period.