Am I best to go bankrupt with personal guarantee debt?

Page 1 of 1

Am I best to go bankrupt with personal guarantee debt?

PostPosted: March 18th, 2017, 2:01 pm
by Clare7
Have been recommended to this forum by a friend and am looking for some advice.
Long story short is that I signed a form for my husbands business to open a trade account for materials. This at the time I was unaware was a personal guarantee. I was a director on the business but in name only. I have been a housewife since 2004, only recently starting work again as a receptionist in September.

The business went into official receivership last year through no fault of ours. Sadly my husband suffered mentally through losing his business and I started to receive letters regarding the personal guarantee. I'm sad to say I could not face this at all and ignored the letters just hoping it would go away also blaming my husband. The business in question has been closed by the official receiver and all finished, I have just received a letter from an enforcement agent demanding £36K in 7 days.

I have no assets and we live in rented property , I have some small personal debt but am in no position to pay this money at all. I really am struggling with where to go with this and what to do , the best I could offer is £50-80 a month , I currently earn £700 per month which goes towards our food bills. I have a friend who has offered to loan my £3k to offer them. What am I best to do ? I have 3 children in school and can see no way out. I would welcome any advice at all. Am I best to go bankrupt??
Thank you for your time

Re: Am I best to go bankrupt with personal guarantee debt?

PostPosted: March 19th, 2017, 11:49 am
by Debtwizard
Hello Clare7 and a very warm welcome to the DebtWizard IVA and debt help forum.

Sorry to read you have been having a tough time of late, it cannot be easy for you or your family.

Just a few questions if I may before I can offer a way forward.

Q. Is your husband currently employed and receiving an income?

Q. Have you spoken to any FCA licensed debt advice companies?

Q. Apart from the £36,000 debt you mentioned, how much would you say the other debts would add up to, this being, store and credit cards, bank overdrafts, personal loans, payday loans and any other business debts. The same apples to hubby.

Q. How is hubby doing with this? Is he any better health wise?

Q. Re the Personal Guarantee (PG), normally these forms are quite specific that you are guaranteeing a debt, do you still have related correspondence or a copy of the PG?

Q. Have you always been in rented accommodation or is there a mortgage property?

Last one, Q. Do you have any sizeable assets?

Look forward to hearing from you in due course. Sorry about the Qs, but need a little more information, bankruptcy may well prove to be the way forward but needs to be confirmed as your best option before you dive into it.

Best wishes,

Re: Am I best to go bankrupt with personal guarantee debt?

PostPosted: March 22nd, 2017, 7:47 am
by Clare7
Thanks Mike for your reply.

Re debt about £10k but its manageable , this has all been going on for 18mths , so the credit cards have been used to get through when hubby had no wages.

He is much better thank you but obviously this is another massive strain.

The PG I cant find anywhere as like I said was ignoring most of it but I do remember there being some comment on the account opening form but I was just signing as my husband needed account open and couldn't get home to sign. Was never told to get any legal advice when signing and was not aware of its real meaning.

I have no assets to speak of everything is in my husbands name as that just something we've always done and had no reason to do different.

We did have a home but sold it in 2010 to put the money into the business that liquidated, sadly, we have rented since, again this is in my husbands name.

He too has credit card and loan debt from when our business failed as we both struggled to deal with it, this again is manageable but leaves not much over a month. He has already been through this process as we had a directors loan against the business too that he managed to offer them a one of payment that he borrowed from his parents.

He has a new business but currently is only earning a wage and I am not on this business as I refused.

I am expecting bankruptcy to be my only option really but welcome any advice , I need to make them an offer of payment plan or offer by Friday.
thanks in advance

Re: Am I best to go bankrupt with personal guarantee debt?

PostPosted: March 22nd, 2017, 2:36 pm
by Debtwizard
Hello Clare7

I take it then your unsecured debt is £10,000 of credit cards and the PG £36,000 making it circa £46,000. With little or no assets then bankruptcy may be an option for you but you are advised to get a review with a reputable debt advice/help agency, I have a list of those that will not charge you fees and are not for profit here ... dvice-help StepChange might be your first call.

If you are able to raise a reasonable sum, for example £8,000 then there is the possibility that you can avoid bankruptcy and offer this to ALL your creditors (£46,000) amount in a full and final IVA with NO monthly contributions. This will obviously be subject to a review but if circumstances are right then it is a possibility. The fees for the IVA would be deducted from the lump sum and not paid separately, this sum could be higher or lesser, it 's flexible but based on what you can afford to raise. More on IVAs below.

Take me to - What is an Individual Voluntary Arrangement, IVA?

We also have a useful link on the IVA v Bankruptcy, the top 10 answers to questions that most worry consumers.

Re hubby, I take it he is not on the Personal Guarantee? If he is then there could be problems if he wished to go bankrupt and continue his business, more so if it is a limited company.

Finally, note the following which you can say to Barclays or the enforcement officer (bailiff) under the Financial Conduct Authority (FCA) Debt Collection Guidelines you are to be given 30 days leave to obtain advice and understand your debt options.

The FCA link immediately below will take you to Conc 7, start there but also see section 'CONC 7.3 Treatment of customers in default or arrears (including repossessions): lenders, owners and debt collectors'.

Particular relevant sections for you are 7.3.7a, 7.3.11 and 7.3.12.

FCA Debt Collection Guidelines

Trust this helps,

Best wishes,

Re: Am I best to go bankrupt with personal guarantee debt?

PostPosted: March 23rd, 2017, 1:25 pm
by Clare7
Mike, many thanks for all your advice I will contact Step change.

Will let you know how I get on.
Warm Regards

Re: Am I best to go bankrupt with personal guarantee debt?

PostPosted: March 24th, 2017, 11:42 am
by Debtwizard
Thanks Clare

Looking forward to reading how you get on with StepChange.

If bankruptcy is your way forward then remember you no longer need to go to court, your application will have to be filed online to an adjudicator.

If you need to read more then see our guide here New - Bankruptcy on-line application

Best wishes,