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Ltd Company Guarantor…court claim incoming

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  • Ltd Company Guarantor…court claim incoming

    My Ltd company took out a short term loan about 18 months ago. It was originally to be repaid over a 12 month period with a monthly interest of 5.7%. This years sales have been down considerably and so we’ve struggled to meet the loan repayments and for a couple of months, the lender agreed to repayments just covering the (eye watering) interest.

    Unfortunately, sales haven’t improved so we had to inform the lender we could no longer make payments. They defaulted the loan and called on myself and my wife as guarantors, so we both applied for breathing space which has just come to an end.

    Due to the excessive interest (yes I knew the interest was high when we took out the loan), even though we’ve paid over £20,000 to the lender, we still owe over £19,000 of the £25,000.

    The lender has said they are 100% not willing to discuss any form of repayment plan with the exception of payment in full and have said they will be issuing court proceedings.

    What I am wondering, is, assuming they do go straight for a court claim without any reasonable discussion beforehand, roughly how long would it take for them to get a judgement and os there any way I can delay said judgement?

    The reason I ask is that we usually have significantly higher Christmas sales than the rest of the year (last year we sold over £100k of products in December alone), so I’d like to think we would be able to pay the overdue balance at the end of the year so if there’s any way of ‘delaying’ things that would be really helpful.

    Obviously, I don’t dispute the fact we owe the lender, however I wonder whether I can file a dispute based on the amount we’ve paid vs the amount still outstanding etc?
    Tags: None

  • #2
    You have a good chance of being able to gain that time if you can put in an arguable defence - but beware of the level of legal costs the claimant will also seek to recover.

    How realistic are your projections?
    Lawyer (solicitor) - retired from practice, now supervising solicitor in a university law clinic. I do not advise by private message.

    Litigants in Person should download and read the Judiciary's handbook for litigants in person: https://www.judiciary.uk/wp-content/..._in_Person.pdf

    Comment


    • #3
      Originally posted by atticus View Post
      You have a good chance of being able to gain that time if you can put in an arguable defence - but beware of the level of legal costs the claimant will also seek to recover.

      How realistic are your projections?
      Thanks. From what I’ve read, the fees would be ‘up to’ £3,800 but the lender is not willing to discuss any repayment arrangement so there’s very little I can do about the court fees unfortunately.

      I presume the lender will be naming the LTD company and myself/my wife (as guarantors) on the court claim so I’m not sure if that complicates anything, but if the worst came to the worst and the court awarded judgment, we would apply to the judge for an affordable repayment arrangement.

      In terms of my projections, we sell products that are often given as gifts so as long as we can buy the stock, we should be able to hit our relatively modest projections. If we didn’t meet the projections, it’d probably be time to close the business anyway in all honesty.

      Comment


      • #4
        Ps do you think it’s worth me offering to agree to the lender applying for a Tomlin order to buy me some time?

        Comment


        • #5
          What would be the terms of this order?
          Lawyer (solicitor) - retired from practice, now supervising solicitor in a university law clinic. I do not advise by private message.

          Litigants in Person should download and read the Judiciary's handbook for litigants in person: https://www.judiciary.uk/wp-content/..._in_Person.pdf

          Comment


          • #6
            Originally posted by atticus View Post
            What would be the terms of this order?
            I was thinking along the lines of we agree to pay x amount per month until the loan is paid in full.

            Comment


            • #7
              That may be a sensible way forward, as long as you are sure that you can make those payments. Why not try to agree a global sum, to be paid by instalments?
              Lawyer (solicitor) - retired from practice, now supervising solicitor in a university law clinic. I do not advise by private message.

              Litigants in Person should download and read the Judiciary's handbook for litigants in person: https://www.judiciary.uk/wp-content/..._in_Person.pdf

              Comment


              • #8
                Originally posted by atticus View Post
                That may be a sensible way forward, as long as you are sure that you can make those payments. Why not try to agree a global sum, to be paid by instalments?
                I wonder if it’s worth waiting until I hear from their ‘legal team’ as presumably they will need to issue a LBA. Currently I have been liasing with who I believe is an account manager and he just acts like a loan shark to be honest. Not interested in helping in the slightest, not willing to discuss any form of repayment plan, etc.

                As soon as I made the suggestion about a payment plan, this was his response:

                ========
                Unfortunately, if you are unable to settle the balance in full then we will be looking to proceed with a County Court Claim, this is due to us needing to secure our position as a creditor before agreeing any payment arrangement.

                I will inform our legal team of the above and you will hear from the courts in due course.
                ========

                I have to admit that I did fly off the handle a bit at this reply so may have some grovelling to do.
                Last edited by gazfocus; 18th September 2023, 21:09:PM.

                Comment


                • #9
                  I am surprised, in that in my experience lenders are usually happy to try to reach an arrangement - that is acceptable to them - before passing the case to lawyers. This is why I have often advised clients to keep the communication going.

                  You could try telling them that if they want to proceed with a claim first when it is not necessary then this will of course be their choice and at their expense, ands that if they should try to ask the court to order you to pay the costs you will show the judge your communications.
                  Lawyer (solicitor) - retired from practice, now supervising solicitor in a university law clinic. I do not advise by private message.

                  Litigants in Person should download and read the Judiciary's handbook for litigants in person: https://www.judiciary.uk/wp-content/..._in_Person.pdf

                  Comment


                  • #10
                    Thanks, I shall try that approach and see how I get on.

                    Comment

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