Personal Guarantees
23rd June 2011
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Frequently Asked Questions

My life partner is worrying about the implications of a Personal Guarantee; do you have any advice to help the situation?
This can be a very worrying time for you, but for a life partner it can appear even worse- if they are not on the inside track or not close enough to the situation, the lack of knowledge can put them in an even darker place. Giving them as much information as they feel they require can often give them a feeling of understanding that may ease their concerns. But sometimes it can create more of a worry.
As a result of our experience, we are quite happy to talk it through with your partner to give them the comfort they need.

What about joint guarantors?
It very much depends on how it was set up - often it's joint and several, sometimes not. There is a choice to be made between going it alone and acting in consort. From a solicitor's point of view, they may have a conflict of interest representing a number of different parties but it is worth weighing up which is the best way to go on this.
This is something that there is no panacea for all- it has to be considered on a case by case basis and there has to be great sensitivity to the relationship of those involved and what their personal circumstances are.

What about the banks' actions during the transaction?
Banks have to behave properly. If, in getting the Personal Guarantee in place they have acted improperly, this may severely prejudices their position. So knowing the circumstances as to how the Personal Guarantee was put in place in the first instance can often reveal these sorts of issues.

What about my other personal debts? Can you help?
Quite often in these situations your personal debt may have been built up as you have been trying to support the business with personal funds to keep it going. We have a specialist division dealing with personal debt management, it is worth reviewing this in the light of the Personal Guarantee issue.

The bank has a charge on my house in relation to the company debts/Personal Guarantee - how does that change things?
They would normally have much better security as a result of a charge on property and it does alter the dynamic more in their favour. But they still have to have acted properly and the situation can be negotiated even if the cards are all stacked in their favour. So ensuring that they did is something well worth looking at.

What happens if I ignore the bank’s letters and demands?
This can be such a hard place to be and that bucket of sand can look so inviting – but ignoring the issues won’t make it go away, it will just accelerate the bank’s action. Look at it from their point of view – if you don’t respond then the only way they can go is to court for enforcement and the further down the road that is, the harder it is to unwind. For this reason, the early commencement of discussion is terribly important.

About the Author

Stefan W

Member since: 16th September 2011

My name is Stefan Wilkinson and I deal with the mis-selling of financial products
Mis–selling is more widespread than you might have realised
I believe mis – selling is wrong and needs highlighting...

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