Welcome to the forum beccam.

Your business partner might well be correct. I'm interested to hear from one of our insolvency experts whether that remains the case if the bank doesn't try to enforce the guarantee until after your partner is discharged though.

In terms of the personal guarantees, did you each guarantee the full amount that the company borrowed?

Do you anticipate that the business will default on the loan repayments (or has it already)?

Yes, we both guaranteed the full business debts. We are in default in relation to the loan to the Bank and the Bank has asked for full payment from the company but not us as individuals.

I am hoping that the liability is still shared and would be interested to hear if it makes a difference when the bank actually ask for payment in terms of the guarantee, whether before after he is discharged.

Thanks

Hi both

This is correct, the Personal guarantee is a contingent debt ( one that depends on a future event)when the date the Trust Deed is signed and therefore exists at the time the Trust deed is signed.

Even if the bank do not demand repayment for a year or 2 or later, it still works its way back to being a claim in the Trust Deed and unfortuantely this would leave you exposed in terms of the personal Guarantee.

Mark

Hi beccam

Sorry I meant to say the exposure would be the full extend of the guarantee, not half as the bank will have the option to pursue for the full amount.

Sorry, I hate being the bearer of bad news.

Mark

Thanks for your prompt reply, even if it was not what I wanted to hear. It seems strange that this is how it works when the bank obviously cannot claim in the trust deed if it is concluded by the time they go after us for the personal guarantee and there is no way for me to reduce my exposure.

I appreciate your help and will come back to you if it gets to the stage that I need further help with my own finances.

Hi beccam

No problem, always glad to help.

Mark

Hi beccam

Strange, I just came out of a Liquidation creditors meeting and the Director advised that he was in the same position you described earlier.

The previous Director signed a Trust Deed and in effect the Trust Deed took account of the personal Guarantee to RBS as a creditor, leaving him with the full extent of the payment.

Delivering bad news twice in 2 days is not good!

Mark