Unlimited Guarantee

[greymatter]

Peeps
I signed an Unlimited Personal Guarantee for my Companies borrowing back in 1998.This was defaulted in 2002 and passed to DCA.I am paying a token monthly payment.
However I have gleaned from various official documents that 'unlimited guarantees should not be taken from individuals'
This is not a guarantee to support a merchant agreement either,its a staight Bank loan for my Company at the time.
Is this agreement either(a) Unfair and therefore unenforceable or:
(b) Not a legal document in the first place.
I would really appreciate your take on this one please.
Many thanks
Greymatter

[greymatter]

Re: Unlimited Guarantee

Hello out there,just a quick sub to get some feed back ,if poss.I know its an odd ball but I would appreciate your thoughts here.
Thanks

[pompeyfaith]

Re: Unlimited Guarantee

Greymatter,

I am not sure myself, but no doubt someone here will know so ill report this thread for you so other mods can take a look in.

Regards

[greymatter]

Re: Unlimited Guarantee

Many thanks
Regards
GM

[greymatter]

Re: Unlimited Guarantee

HI mods
Any thoughts or suggestions on this one as I want to tackle this soon ,but don't know enough about the law covering this,but does look as though this should never have been issued.So any help and direction would be great.
Thanks
GM

[Never-In-Doubt]

Re: Unlimited Guarantee

I really don't know mate - what exactly is the issue with this...?

If you're paying 'token' payments then there is no real urgency, so best wait and get the right advice first - that's what I would do..... I genuinely don't know enough about these - maybe Garlok / Flower or CC will - I'll ask for you....

Niddy

[CleverClogs (RIP)]

Re: Unlimited Guarantee

Peeps
I signed an Unlimited Personal Guarantee for my Companies borrowing back in 1998.This was defaulted in 2002 and passed to DCA.I am paying a token monthly payment.
However I have gleaned from various official documents that 'unlimited guarantees should not be taken from individuals'
This is not a guarantee to support a merchant agreement either,its a staight Bank loan for my Company at the time.
Is this agreement either(a) Unfair and therefore unenforceable or:
(b) Not a legal document in the first place.
I would really appreciate your take on this one please.

Without seeing the document, it is impossible to pass any comment upon its legality, but its apparently unlimited nature does cause some disquiet.

Who owned the company? Was it a limited company? How and why was it wound up - or did it continue to trade after 2003? Which bank was it and why did they require you to pledge 453.592 grams of flesh in this manner?

[Never-In-Doubt]

Re: Unlimited Guarantee

Without seeing the document, it is impossible to pass any comment upon its legality, but its apparently unlimited nature does cause some disquiet.

Who owned the company? Was it a limited company? How and why was it wound up - or did it continue to trade after 2003? Which bank was it and why did they require you to pledge 453.592 grams of flesh in this manner?

Thanks CC

would you be happy to view the document if he was to email it to me and I forward to you? Or do direct, if you PM him your email addy - i'm happy with that, so long as someone that understands these things can help - thats the main thing.

And yea, for some mad reason I do trust you CC

[CleverClogs (RIP)]

Re: Unlimited Guarantee

Could you please add a bit more info here, I may be able to ge someone to look into this

If you could, that would be wonderful as I'm not sure I would be the right person to gee into looking into anything.

[greymatter]

Re: Unlimited Guarantee

OK Wow this is some response thanks .The basic info is:
I owned the Company
THe Company was Ltd
The loan is not secured
It was for a Business Bank Loan
The amount o/s is £6k
The Company was wound up Sept 2002 due to Supplier product failure.
The Bank was Barclays
I will pm CC with copy docs tomorrow.
Thanks all.
GM

[greymatter]

Re: Unlimited Guarantee

Thanks FP
CC I have emailed the docs to you
Plse let me know if you dont get them.
GM

[CleverClogs (RIP)]

Re: Unlimited Guarantee

OK Wow this is some response thanks .The basic info is:
I owned the Company
THe Company was Ltd
The loan is not secured
It was for a Business Bank Loan
The amount o/s is £6k

Thank you for the documents.

What I do not understand is:

• why you did not change the company's bank to one that imposed less onerous conditions
• how much money was loaned to the company
• why the guarantee was unlimited and hence could have exceeded the value of the loan
• under how much pressure were you to agree to the guarantee

[greymatter]

Re: Unlimited Guarantee

Hi CC
At the time 1998 I was under a lot of pressure business wise and changing the Bank did not occur to me.I did query the unlimited bit with the Bank manager who came to my office with the docs.He told me that'not to worry as the Bank would never impose this condition' he was coming across as doing me a favour with the loan as the company had only been trading for a year or so and was not yet generating sufficient funds to stand on its own.The loan was £10K
I did not show this to my solicitor as the Bank Manager did not raise this issue and in light of his statement that they would not impose the situation.
I was under pressure(the Bank wanted this surety as I would not be given the loan without it .
These points I can recall to the best of my knowledge.
Reading through the whole thing now makes me realise just how desperate and naive I was.
I hope this info gives you a better insight into this problem.
I know this is not an urgent issue but I have stepped back from dealing with it until now as I want to clear all my debts that were incurred thro poor bank advice.
I am slowly getting there with your help at AAD.
My reading of the current and prior Banking Rules(Lending Code), is that unlimited guarantees should not be taken from individuals.This is what started me investigating the whole thing.
GM

[garlok]

Re: Unlimited Guarantee

Hi greymatter,

Niddy has asked me to look in on your thread here. We had our business account with Barclays, an overdraft and a business loan. These were the subject of a personal guarantee. However a "personal guarantee" can never be unlimited as such and can only extend to the total indebtedness to the bank. Barclays were and are real B*****DS at this. However there are certain elemants at which they are not so good at. There are some bits I am unsure of but Mrs G, as an accountant deals with all our admin is going to have a look and see what she can turn up.

Firstly, Barclays will always swing these matters into the area of Common Law of Contract outside of any Statutory restraints. The Common Law, without being derogatory to you or anyone else, says that you can put any clause you like into a contract as long as you can find some fool to sign it. Caveat emptor applies. However there are some riulings now which mean that a personal guarantee has to be reniewed on an annual basis and if they tried to enforce you copuld make a battle of it. What I cannot come to a conclusion on is the effect of you continuing to make the token payments is having.

When a limited company goes into liquidation and a personal guarantee is in place it has been normal practice for the bank to come to a properly formualted arrangement with the guarantor. The sum becomes fixed with no further charges or interest accruing and p[ayments are made against an ever decreasing capital sum.

What happened with ours was that bloody Barclays (Niddy says I am Barclays Number 1 Hater) stripped the business account to its full OD limit and above exercising their "right to set-off" because we had disputes with Barclaycard. They tried then to charge us for the privilege. Earlier they had tried to divert income from our Barclays Merchant Services account direct to Barclaycard. Like I said absolute bastards! Please note that at the time they did this ALL of our cards were full paid up to date but we were complainig about the way we had been treated over a period of some two years once they found out I had a heart condition.

However they lost out because at that point we opened a parachute account elsewhere diverted all income there, closed the merchant services account, and gave them the opportunity to come to the negotiating table for compensation and damages. They refused. We then asked our solicitors if it was viable to negotiate a F & F, if so would they do it? Yes they would and it was viable. Without further ado they asked us to obtain two third party cheques totalling 10% of the full amount and sent them off. Barclays are so greedy and stupid they cashed them without reading the attached letter. They are then stuffed completely Bracken v Billinghurst (CoA) plus a load of other case law kicks in. End Of. Barclays did try it on but a couple of other stroppy letters from the sols and myself to them and the DCA they tried to use put it to bed. Total cost in fees in the end £245 for a saving of the best part of £9.5K.

Do NOT try to do this yourself. Always do this through a solicitor who knows what they are doing and has good knowledge of the case law. This is NOT simple Statute Law this is Common Law and is expensive if it goes wrong. Your average High Street solicitor will not know this and will probably try to fob you off with a case known as Commissioners of Inland Revene v Fry.

There is a write up on Unlimited Guarantees here:-

http://www.simply-docs.co.uk/documen...?documentID=34


Might be worth a look in explanation of what Braclays have stitched you up with.

regards
Garlok

[greymatter]

Re: Unlimited Guarantee

Thanks Garlok
Incidently my token payment handled thro Wescott is very small indeed and I have not had any pressure to do anything like increase the amount.This has not changed since mid 2005.
Thank you for your response and valued input Garlok.I hope that there is a flaw with this agreement as the banks do refer to these u/l guarantees as a definite no no and should not be offered.
GM