Anyone work for business banking give advice on personal guarantee??

Long story short, my dads company was forced into administration by the bank..

It is trading still but he was effectively sacked by administrators and allowed no contact, he hd made personal guarantees for debts which the bank are now calling in.

He stands to lose his home and everything else he owns..

He believes he was led down this road by the bank and really isn't sure what his options are..

I have asked him to contact IBAS but really want to know if there is anyone in this field that could perhaps give me a banking side of things??

He is liable for 1.5million - this was personal guarantee against the business loans which he was effectively told was the only thing to do to save the company at the time...


anyone who can help i would really appreciate it...

Sorry Dani, but that doesn't sound very hopeful at all, though of course it will depend on exactly what the guarantee document says. (I'm not a banker or related to finance but do deal with guarantee agreements from time to time)

My advice would be (and I appreciate that there may be no funds for this, but it really is very important) to get a very good solicitor - one that is experienced in corporate law. You should find that many will give you a quick consultation without charge in order to understand the case.

It must be such a stressful time for your whole family - I really hope he can get it sorted.

thanks hunny, its just all so crappy to be honest, as my dad feels he was totally screwed over by the bank as they forced him into doing it effectively. The company was initially in trouble 2 years ago and the bank basically said the only way to go was to make it go down and then restart as new company so they did that brought their own accountants in etc and my dad had to pay for all that and not 2 years later they force it into administration even when at the last minute he got an investor, but they said it was too late and pulled the plug. the previous investor who pulled out and caused the last minute action has since "bought " the company and only my dad is being held liable for everything even when there were two other directors who are now working for the new company.... my dad doesn't even know how much the business and land etc was sold for.... so how does he know what he is being made personally liable for??

its just so so wrong..

Oh what an awful state of affairs. I can't help but really sorry that's happening to your dad

I feel sorry for your dad but unless he can prove he was 'forced against his will' to sign guarantees or really criminally negligently advised to do so - I think he will be held to honour the guarantees he signed.

He was at least guaranteeing his own money/business or whatever, and not someone else's. Many have found themselves in his situation because they 'did a favour' for a pal or family member signing as guarantor - never thinking for a moment that they would ever be called upon to honour it.

It's quite common now for first time home buyers who have insufficient deposit to meet the bank criteria to be asked for a guarantor (usually parents) and also common for them not to read the small print until it all goes wrong.

So sorry to hear this Dani - so awful the they have taken what he has worked so hard for

I would contact a good law firm so you can find out exactly where you stand. *hug*

thanks he has tried to speak to bank regarding anything he can do to try and cover the guarantees but they just dont seem to be interested - I have put him in touch with IBAS who seem to suggest that there can be a fight brought to the bank and too many just rollover and accept whats been done... he will go down fighting its just that at 62 i am very worried that it will kill him doing it...

all because the investor pulled out at last minute because he saw the opportunity to get a business at a good bargain price if it went to administration... disgusts me.. My dad owned it all, even the ground it stood on and now he quite literally could end up with no home.

Going into administration is a step taken to try to save the company from bankruptcy. You can either elect to go into Administration yourself or have it forced on you by a bank. But the idea is supposed to be to give you a breathing space and protect you from creditors, giving you time to reorganise affairs.

During the reorganisation period the administrator runs the business rather than the director(s) running it.

I'm not clear from what you say but it sounds as if your dad took out a personal guaranteed business loan after the company first ran into trouble? (These are common also when a company starts up). That was probably the only type of loan available to him in the circumstances.

There are risks associated with personal guarantee loans and it is well to acquaint yourself with them. The correct time to get good legal advice is before signing up to a personally guaranteed business loan.

What a nightmare for you all.

I have no advice sorry but will say if your dad was forced into this agreement and an investor waited to get a business for a good rate and was maybe friends with someone in higher places ie: someone in the bank I hope they get whats coming to them and your dad gets peace of mind and the family too.

Hearing news and what has gone on with the banks recently it really wouldn't surprise me if something underhanded has gone on.

(((Hugs))) to you all I am sure you all feel like you are living in a nightmare at the moment.

well it gets worse...

MY dad AND mum got served papers yesterday asking for 2.6million to be paid in 14 days or further action would be taken by the bank... Their bank accounts were then frozen...

They have been in contact with lawyers since this all happened and my dad feels he has nothing else to lose so is going after the bank to try to prove they already had agreement in place with the investor to sell the company to him. The lawyers seem to think he has some sort of case, but proving it will cost a lot. Meantime the bank are gunning for my mum and dads home.. which means unless the family can step in and buy it then they will inevitably lose absolutely everything = from all the land etc they had with the business to their entire home which my dad built himself with his own hands. Its owned outright so its easy money for the bank and they want it.

I actually have no idea what to do for my mum and dad as we simply do not have the funds ourselves to help.

I didn't think the bank had tyne right to freeze assets until you have actually been sequestrated and that actually hasn't happened yet they only got the papers at 330pm yesterday.. and the accounts got frozen soon after,. They have no money at all.

Has anyone ever been made bankrupt? what was it like - what did you lose and what are the chances that they wont lose their home..

The house was specifically built with my disabled brother in mind as has specially designed bathroom, with roll in shower, wide doorways and continoious flooring etc for his wheelchair, and although he doesn't live there presently as is in 24/7 PA living he does come back about once a week, my Nonna also regularly comes to the house as she is also wheelchair bound and needs special toilet etc. which she can use in my mum and dads house... I am wondering if they will take this into consideration when working out whether the house is a valid asset or not. Can they actually chuck them out on the streets as it were? If they have no income and no home with no credit options then how exactly are they supposed to get back on track..

Its all just a complete mess.

What makes it worse is the rumour going around the old company is that my dad was stealing money from it thus forcing it into administration which is so far from the truth ( and i suspect but cannot prove has been started by the other director that set him up for this in the first place) He in actual fact was using his personal funds to pay staff wages at one point as there was no cash flow...

i am so so so angry right now and its made worse as their is simply nothing i can do