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Challenging a personal guarantee (technicality)

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  • Challenging a personal guarantee (technicality)

    Hello

    About 6 years ago we put our Ltd company into liquidation. At the time of closure we had a bank overdraft of around 25k which we had signed personal guarantees to.
    Long story short, we owe the bank 25k which we have been paying off monthly for the last few years.

    About 2 years prior to closure our overdraft facility was 15k (No Guarantee), but we wanted a larger facility to expand.
    We were told we can have a facility of 25k but it would have to be guaranteed by the partners.
    We agreed and signed away, after all we were going to be millionaires with our new larger overdraft, Not.

    We signed for full guarantee of 25k, even though there was already 15k of un-guaranteed liability in place.
    This guarantee was heavily in favour of the bank considering we were already in debt to them for 15k.

    My question is this; Could there be a potential challenge to the validity of the guarantee due to the one sided nature of the contract?
    We basically guaranteed 25k for an additional 10k of funding!

    I cant quite remember if we were advised to get independent legal advise, i presume we were.

    Any advice or pointers would be appreciated.
    Tags: None

  • #2
    The PG is likely to have a clause in that you agree you had opportunity and were advised to seek independent legal advice.

    And it sounds like you agreed to PG the OD facility, as opposed to a specific amount. And as the OD facility was PG'd, you could get a higher limit. You likely had the option to say no to the PG on the overdraft and take out a loan elsewhere for the 10k you felt you required.

    Do you have copies of the PG's ?
    #staysafestayhome

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