Guarantor on business loan

[John White]

Hi All. Hopefully this won't be too long winded!

I have a start up business and as well as my life savings I also had a bank credit line worth 25k put into the business. The first year of business did not go well and I'm now slowly turning the corner.

In July the bank withdrew my BCL without any notice. I never received letters even though they said they were sent. As guarantor to the loan they are now chasing me personally for payment. I had engaged with the bank the whole time and sent them everything they have asked. If I as guarantor now owe the money does that mean the company is free of the debt?

I do not own any property but my wife owns a house from before we were married. Could that be dragged in at any point? My wife works half time so that is whate we barely survive on.

Could I get a PIA or DRF personally and still have the business functioning. I do not take a salary or anything from the business. It is barely covering costs for the first time this month.

Any advice would be fantastic.

 

[gahfan]

Hi John, i would say it depends on whether your wife's name is on the business etc. Best of luck anyway

 

[cremeegg]

If I as guarantor now owe the money does that mean the company is free of the debt?

No. Unless the company has been wound up it still owes the money.

I will not pretend that I am qualified to give you proper advice on this, but it seems to me a bit over the top to consider a PIA in these circumstances.

Pay the bank something, from the company and keep talking to them. By all means let them now that you personally have nothing to pay them.

It is most unlikely that your wife house could be dragged in, even if she is a director of the company, certainly not if she is just an employee.