Business loan personal guarantee

[Crazydennie]

I am a director of a limited company but the business has ceased trading and I am receiving universal credit. There are currently two outstanding loans with unsecured personal guarantees. One company has been very understanding of my current position but the other has sent the debt to a collection agency. I have very limited fund to make repayment so I expect that this will turn into a ccj for the business. Can I expect that this will appear on my personal credit file because of the guarantee?

[ULA]

Did they send the debt to a collection agency after you let them know about your current financial situation?*

How much is the debt valued at?

[Crazydennie]

I have recieved a debt collection letter which I haven't responded to.*
The outstanding amount is £1800.*

[Crazydennie]

Yes it was after I let them know.

[ULA]

Thanks for the information.

The main threat at the moment is that they decide to take court action and given the level of debt this will be small claims. Given that before COVID19 we know it was taking about 37 weeks to go through the court process this will only increase since many courts have temporarily closed or working on reduced staff currently.

I suggest that you respond to the letter explaining in brief your financial situation. At least that way it is on record at this early stage that you are struggling financially currently and are on UC. *

*

[Crazydennie]

Ok thank you for your* your advice.

[Mary Jones 2]

what i have done is write -you can offer £1 a month as a gesture of goodwill , while the legalities of the debt are proven, or accept and full and final settlement of say £400 (if you have it) 20-30% of debt with a I & E showing no money

some have accepted straight away - i think its all about cash flow at the moment for everyone*
if they go for the £1 - do it as shows judge in court that legal action could have been avoided as you were paying anyways with good explanation

*