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Business Personnal Guarantee
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I have a personnal guarantee on a business overdraft which should have been paid off when I was brought out of the partnership, it now seems this did not happen and I am now being pursued for the outstanding amount. (even though I have an agreement which indeminfies me against any guarantee) This is not secured, just a personnal guarantee, Can I transfer the equity and mortgage over to my husband now without any worry of the bank trying to make a claim on the equity?? Any help much appreciated. Many Thanks
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McP This is a complicated question.
Firstly you can't escape it by passing your assets over. If you were forced into bankruptcy it would be deemed to be voidable as it would be a preferential trasaction.
Was the Bank aware that you were no longer a partner? You are obliged to give notice to a lender as the Bank may have chosen to pull the overdraft eg if you were the only guarantor that had any assets the Bank would be effectively left with an unsecured loan. Obviously if you notified the Bank and it continued to lend the money then you should not be liable.
Most partnership guarantees are joint and several so the others are also liable.If you have to pay it off then it falls on you to collect the others share yourself.The Bank will collect it from anywhere it can but you may get them to accept a deal if its not a huge amount as they wil not want to go legal for small sums.
I would also check that the same Bank account was kept by the others.Was your name moved from the Mandate to sign cheques it may add weight to your arguement that the Bank and who wrote the Indemnity? If it was a solicitor you should have been advised to notify the Bank.
Please feel free to reply.
Firstly you can't escape it by passing your assets over. If you were forced into bankruptcy it would be deemed to be voidable as it would be a preferential trasaction.
Was the Bank aware that you were no longer a partner? You are obliged to give notice to a lender as the Bank may have chosen to pull the overdraft eg if you were the only guarantor that had any assets the Bank would be effectively left with an unsecured loan. Obviously if you notified the Bank and it continued to lend the money then you should not be liable.
Most partnership guarantees are joint and several so the others are also liable.If you have to pay it off then it falls on you to collect the others share yourself.The Bank will collect it from anywhere it can but you may get them to accept a deal if its not a huge amount as they wil not want to go legal for small sums.
I would also check that the same Bank account was kept by the others.Was your name moved from the Mandate to sign cheques it may add weight to your arguement that the Bank and who wrote the Indemnity? If it was a solicitor you should have been advised to notify the Bank.
Please feel free to reply.
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