I have been a company director until last month when i had to put my company into administration. I had signed a personal gaurantee with the bank for £90000. I had done this a number of years ago not considering there ever would be a time the bank would actually ask me for the money. I didnt even mention it to my wife. Our family home is in joint names, my wife doesnt work. Our home is worth £300000 and our mortgage is £110000. Does the bank have any legal write to make us sell our home? espesially as my wife had no part in my agreement. Also if I signed my half of the home to my wife could I make myself bankrupt?
I imagine that as your equity in the house far outweighs the value of your debt that your best option is to remortgage and pay the debt off.
I doubt you would be classed as insolvent.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
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If the only debt that you have is the £90k then a remortgage is an option. However, given the state of the lending market it may be difficult to raise the necessary funds and if this is the case the bank may accept a reduced amount as full and final settlement.
In addition, if there are other liabilities you may be insolvent and should seek advice from an IP. It also may be advisable to check the personal guarantee with a solicitor before you pay it.
Hi
If you signed your half of the house over to your wife and declare bankruptcy the Official Receiver would just reverse the transaction.
Have a chat with several companies to find the best way forward for you.
Regards
You must absolutely not transfer your interest in your house to your wife, to avoid paying this debt. As Andy has already stated this would be a transaction at undervalue, which would be easily overturned by a subsequent Trustee, and you would probably end up facing a large costs bill and perhaps a Bankruptcy Restrictions Order in the process if you were to be made bankrupt.
The Bank will know that you are a joint property owner, and are bound to pursue the route of bankruptcy in order to recover this sum from you.
I would suggest that you try and negotiate an affordable settlement with the Bank, whilst looking at ways you could refinance the property, if this would be affordable. You may also like to bounce the validity of the guarantee off a lawyer, to make sure that all is in order.
I have been a company director until last month when i had to put my company into administration. I had signed a personal gaurantee with the bank for £90000. I had done this a number of years ago not considering there ever would be a time the bank would actually ask me for the money. I didnt even mention it to my wife. Our family home is in joint names, my wife doesnt work. Our home is worth £300000 and our mortgage is £110000. Does the bank have any legal write to make us sell our home? especially as my wife had no part in my agreement. Also if I signed my half of the home to my wife could I make myself bankrupt?
The bank has no legal right to make you sell your home but they can effectively get judgment against you under the terms of the guarrantee and thereafter can force your bankruptcy. At which stage a Trustee in Bankruptcy would attempt to realise your half share in the property by either requesting your wife to purchase same, failing which to apply to Court for an Order for Sale.
Presumably the guarrantee you signed was an unsupported one as otherwise if it was supported by a charge on your property your wife would have had to sign some documents and be separately represented.
There is no harm in checking with a solicitor your guarrantee document - I presume you signed it when you were given facilities from your bank for your limited company?
Overall a deal should be negotiated with the bank which can avoid a sale - for example a re-mortgage (with your wifes consent) based on you having an affordable salary from some job that presumably you will be taking.
I would seek professional advice at the earliest opportunity. Good luck and let us know how you got on.
Last edited by David Mond on Wed Jan 07, 2009 2:00 am, edited 1 time in total.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
If he has more than enough equity in his house to pay off the loan - why would the Trustees make him bankrupt?
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
