Been chased for ex business partners dept

[big mistake]

Hi, I have recently been contacted by wescot a dept collection company regarding a dept my ex business partner created and not paid.I set up a ltd company in 2002 with my then business partner, we had a £15,000 overdraft to help cashflow and credit cards with a total of £5000 limit.We had sign a joint and several guarantee at the time.In 2003 we set up a shop and gained a 3rd director his job was to run and manage the shop. in 2005 my original partner resigned as director. then in 2006 I resigned as director due to diffrences with my other partner. He agreed with me in writing to take over the account and guarantee for the overdraft etc and wrote to HSBC to arrange this once he had been to sign all the relevant forms I went to my branch to check he had removed me from the account and overdraft guarantee which i was told he had. but big mistake i never got anything in writing! He has now gone bust and owes the bank £25,000 which they are now asking myself and my original partner to pay!
I cannot understand how he guaranteed the £15,000 overdraft (which he did) and was the sole director and we were removed from the account and creditcards. yet we are still liable! I have also found out the reason he went bust was because he paid himself more than the company was earning over 60k last year and paid for his wedding and honeymoon on the company account! please can someone give me some advise on this situation? Ps the bank just says that even though he did guarantee the £15000 the account was not closed when he took over the company so its still down to us! why didnt they tell me that at the time!!!!

[big mistake]

Re: Been chased for ex business partners dept

Could someone tell me if the bank should have checked the security on the £15,000 overdraft my ex business partner took over from me when I left 3 years ago?

They have told me that he did give a guarantee on £15,000 but my name remained on the security as the overdraft was not closed!

A friend of mine is a business manager and told me that they dont close ltd company overdrafts if a director leaves, and that the bank should have removed me from the security once the other director took over the account.

Also should they not have checked the security on the overdraft when it was renewed each year? I found out he informally extended the overdraft several times
over the last couple of years rising up to £20,000!

[natweststaffmember]

Re: Been chased for ex business partners dept

Which bit do you have in writing?
What part of the issue is verbal and who was the person that gave you that verbal assurance?
Did you keep a diary at the time and was the entry recorded?

[Guest]

Re: Been chased for ex business partners dept

It is up to you to ensure that you are no longer liable for any personal guarantees that you may have entered into.

Unless you have specifically sought and been granted a release from this guarantee, your liabilities under it may continue, regardless of what has happened since.

Search the forum for "personal guarantee" and look in particular at this thread, as you may be able to claim misrepresentation. Personal Guarantee on Company HP agreement - Legal Beagles

[big mistake]

Re: Been chased for ex business partners dept

Thanks for the quick reply,
I agreed with the remaining director that he was to take over the account and security on the overdraft, I have a copy of the letter he sent to the bank Informing the business manager that I am resigning as a director and that i want to be removed from the security and that he wants to take this over.
When he told me he had been to the bank a couple of weeks after the letter was sent, I then went to the branch and asked the business manager to confirm he had received the letter and that it had been taken care of he said yes it had.
I have a copy of a letter from the bank to the remaining director confirming that an induvidual guarantee had been set up,
But stupidly I was too busy setting up a new company and didnt get anything in writing.

[big mistake]

Re: Been chased for ex business partners dept

I have bee told by the bank that the remaining director did set up a personal guarantee for £15000 but they still have my guarantee on record.
They had confirmed that they received the letter from the remaining director asking them to remove me from the account and overdraft guarantee and for them to arrange for him to take it over.
So surely that proves that they received the instruction but someone forgot to remove me from the guarantee?
I have asked the bank for all the account records but as Im no longer the account holder they
wont give me a copy, Is there any way of me getting this?