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My company is going into liquidation, am I liable for the overdraft? |
Submitted on: 6th Jul 2010 by Non-Member | Total Answers: 1
My company is currently going into liquidation and the bank account has an upaid overdraft of £1,186. I now have a debt collection agency chasing me for the money claiming I was a guarantor but at no time did the bank make it clear to me I would be acting as a guarantor on the overdraft. I have asked for a copy of the agreement showing me as a guarantor. I assume if they cannot produce this, I will not be liable? Also, if the approved overdraft is £1,000 surely I would only be liable for the £1,000 and not the £1,186, and if I was not made aware that I was a guarantor can I dispute that I owe the debt?
Re: My company is going into liquidation, am I liable for ...
A bank will generally ask you to sign a guarantor document and advise that you seek independent financial advice prior to signing the document. Therefore, you should have been aware when signing to be a guarantor. If this is not the case you need to complain to the lender regarding their conduct. Once you have exhausted their internal complaints procedure you can then complain to the Financial Ombudsman regarding the lender’s practice.
The lender will have a copy of the agreement and you should have been provided with one initially. They are not necessarily obliged to provide a copy on request. If they start enforcement action through the courts and you dispute that you owe the money but later they provide evidence that you were a guarantor you will be seen to have lied to the court which can lead to serious consequences.
Regarding the £1000 limit, interest and charges can be included in the total amount owed if set out in the original guarantor paperwork, therefore it is possible that the full £1186 will be owed.
This question has been answered by Christians Against Poverty, a leading debt charity offering hope and a solution to anyone in debt.
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