It is a sign of the times that directors are being pursued under personal guarantees that they gave supporting company lending in the past. The Company may now be in Liquidation and therefore the banks, in the event of not being fully repaid, are now looking at all of their options which often includes considering enforcing the terms of any personal guarantees.
Most personal guarantees are given by directors of Companies but this is not always so, some are also given by the director's spouse and could include the bank having the support of a charge against their matrimonial home in securing the personal guarantee.
If a personal guarantee that you have given is being called upon then you should immediately take legal advice; there may be grounds for challenging the personal guarantee or defences available that could well reduce the liability payable under the personal guarantee. At the very least if there appears to be no challenge or defence then it is always possible to negotiate with the bank.
The worse thing that you can do is ignore the bank. If you do nothing you could find yourself faced with court proceedings bankruptcy or worse still losing your home. Acting quickly can avoid such actions and may ultimately cost you less.
If you have issues concerning a personal guarantee that you have given then telephone Leanne Schneider-Rose at Sydney Mitchell LLP in the restructuring and recoveries department on 0121 698 2200 who can consider with you whether you might have any challenges or defences to a personal guarantee that you have given.
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