Sapphire v Natwest - SORTED !

Sorry guys but this is very important to me and I need help big time! Hope you don't mind me posting this on team but to be honest I'm not sure about posting this on open forum as yet, until I have gained some help from my friends (yourselves) here.
Oh blimey this big brown envelope plonked itself on our doorstep yesterday addressed to my Old git. Inside is a claim form etc, normally I would be happy to sort this out, I'm quite confident usually to deal with debts/court claims etc but this one is different. As you read on you will see why!

Claimant: National Westminster Bank
Defendant: The Old Git

Brief Details: The claimant's claim is for breach of contract of a guarantee dated 31 July 1996, formal demand for payment under which was made by the claimant by letter of 6 July 2000. Further particulars are as set out overleaf.
Particulars of Claim:
1. The claimants are bankers carrying on business at their branch at xxxxxxxx and elsewhere.
2. By a contract in writing dated 31 July 1996 and made between the claimant of the one part and the defendant of the other part in consideration of the matters therein contained the defendant agreed with the claimant to guarantee the due payment of demand of all monies and liabilities due thereunder from xxxxxxxxxxxxxxx Limited to the claimant together with interest commission and banking charges thereon provided that the liability ultimately enforceable against the guarantor should not exceed in the aggregate £30,000 with interest thereon both before and after demand.

[Sapphire]

3. The claimant will reply on the said contract of guarantee at the trial hereof for its full terms and effects.
4. From the said date the claimant has made money advances to xxxxxxxxxxxxxxx Limited together with interest, commission and banking charges.
5. By letter dated 6 July 2000 from the claiman to the defenant the claimant demanded payment under the terms of the guarantee.
6. As at 3 July 2007 the state of the account between the claimant and the defendant was as follows@

Principal debt as at 6 July 2000 £30,000.00
Interest Accrued since that date £23,053.21
Total £53,053.21

7. Interest is payable at 3.50% per annum above the claimant's base rate which is currently 5.50% per annum but is subject to variation. The current daily rate of accrual of interest is £13.08 per day from 3 July 2007 until judgement or sooner payment.

Signed: Richard Mark Dean Webb
Cobbetts LLP.

As you can see this is a very hefty debt. This started long before I met Les and tbh I am really worried about it. Can someone please advise me what to do next. Like I said before I wasn't sure about posting this in general forums, I think it needs you experienced minds on this.
Oh hell, what next !

sapphire

[Nattie]

Was he acting as guarantor for something?

[Sapphire]

Hi Nattie,
He says it was a personal guarantee, I have some papers here a letter from Nat West, dated 26 July 2006 it says its a Guarantee Liability to xxxxxxxxxxxxxxxx Limited.
Another letter from Royal Bank of Scotland, dated 31 July 2002 heading Guarantee to support the outstanding indebtedness of xxxxxxxxxxxxxxxxx Ltd, xxxxxxxxxxx, Essex branch.

When I first saw this I thought that it was secured on the house, god knows what he agreed to, I keep asking and he says he can't really remember. What do you think, is it likely to be secured or unsecured ? If its unsecured then would I be right in thinking fill in the response pack as usual and make an offer to pay, hoping that the judge is in a kind mood on that day.

sapphire

[Nattie]

I think it is secured because of the amount involved but without a copy of the original signed paperwork it would be difficult to ascertain.

[Amy]

Brief Details: The claimant's claim is for breach of contract of a guarantee dated 31 July 1996, formal demand for payment under which was made by the claimant by letter of 6 July 2000.

I take he doesn't have the letter dated 6th July 2000 or remember what it was about?

[Sapphire]

No, sorry Amy no letter.

Just a point we received letters from Cobbetts asking for payment proposals, and I wrote back to them on 6th June 2007 with a proposal. Letter back dated 14th saying thanks and will put them to clients and will take instructions. Got a letter back, dated 3rd July and received 6th July saying:
Our client has confirmed that your offer of payment is unacceptable. In the circumstances, our instructions are to commence action for the balance outstanding.
We received the court papers yesterday 7th. Issue dated 5th July. Now to my mind thats not fair we havn't had a chance to reply to the last letter have we.

Question 1: Should we ask the court for time to prepare ie the 28 days
Question 2: Should I fax over to Cobbetts asking for all copies of paperwork etc that they hold, in the hope that they will provide something that will tell me if this is secured/unsecured etc.
Question 3: Should I/we just avoid the above and fill in the Income & expenditure section and hope that the judge will agree to a minimum payment every month.
Question 4: Ignore it and see what happens.
Question 5: Sell up and disappear.

Oh god all the time I've been helping others and its come to this.

[Amy]

My first thoughts are, why are you agreeing to repay this debt when you do not know what it is for?

Cobbetts will reject your offer of repayments because they want the full amount as soon as they can get it.

This is clearly not going to be Small Claims, so what about a CPR Part 18 request?

[Sapphire]

That looks a good idea Amy hun. Thanks for that idea.
Right I'm going to own up now peeps, this is totally beyond my comprehension and capabilities. To put it in its basic terms I/We are ****ting ourselves over this. I am not stupid by any means but this is completely over my head.
Please, Please, Please will you hold my hand with this all the way, I seriously need to know, what to write, when to write it etc etc
Oh dear now I really am starting to sound desperate, and we've been doing so well lately, i'm totally mortified by this.

sapphire

[Celestine]

Hi Sapphy

This seems like quite an odd situation.

1/ Is this xxxxxxxxxxxxxxxx a company that he is an owner of?
2/ if so, was he a director and was the company Limited?
3/ Usually in such arrangements, solicitors are involved to advise the guarantor

4/ There has been an offer by you ( a proposal) what was this and why did you propose it?
5/ Did the company go bust?
6/ Was there any contact since 2000, what was it?
7/ Were there other directors?
8/ What was the company?

I'll think of more Qs no doubt..........

Definitely a CPR18 request will be appropriate.

Just my preliminary thoughts......

[Sapphire]

Hi Sapphy

This seems like quite an odd situation.

1/ Is this xxxxxxxxxxxxxxxxxxx a company that he is an owner of? Yes he was the Managing Director and shareholder.
2/ if so, was he a director and was the company Limited? Yes and Yes
3/ Usually in such arrangements, solicitors are involved to advise the guarantor He can't remember, but thinks not.

4/ There has been an offer by you ( a proposal) what was this and why did you propose it? I made an offer because Cobbetts wrote and I sent them the following letter:
I am in receipt of you communication dated 23 May 2007, and a very sorry not to have replied sooner.
Due to being made redundant 18 months ago, and because of my age and not being able to find suitable employment, I have had to start a small business, which is slowing becoming able to support me.
After having had a period of unemployment and starting the new business I have not had a wage, which has put a strain on household bills, which I am slowly getting paid up.
I enclose a personal buget sheet which shows my income and expenditure, from that you can see that I am only in a position to offer to pay you a maximum of £25 per month, I am not in a position to make any larger payment proposal.
Due to my circumstances being as they are, I would ask that you hold any further action for a period of one year to allow me to get my finances in control, if my circumstances do change I will of couse inform you.
I appreciate your co-operation in the matter and look forward to hearing from you in the near future.
5/ Did the company go bust? Yes in 2000
6/ Was there any contact since 2000, what was it? Yes a letter from Royal Bank Scotland on 19 July 2002 asking for the money and threatening legal action. Les phone them on 26th July 2002 wrote back on 30 July 2002 stating he hadn't received their letter of 22nd April 2002, and that was why that hadn't had a reply. "The sale of my former home at xxxxxxxxxxx has now been completed, but at a much reduced sale price. Unfortunately due to the break up of my marriage the equity in this property has been divided, and after paying various expenses I am left in a negative position. I am however buying a new property which has just been surveyed and I am awaiting the formal mortgage offer so that I can proceed with the purchase. As there is no onward chain the completion date is expected to be mid to end of August. Once this has been completed I will have some funds available and will be in a position to discuss a negotiated settlement with you".
Letter received dated 31 July 2002 saying ok, we are prepared to defer receipt of firm and realistic repayment proposals until 30 August 2002.
Then nothing till July 2005 giving him 7 days to contact them. I have a note here to say Nat West, 3rd of each month, £250 per month. Ref. CBFM 1843 Claire Osborne.
7/ Were there other directors? No.
8/ What was the company? Freight forwarding etc.

I'll think of more Qs no doubt..........

Definitely a CPR18 request will be appropriate. How do I go about doing one of them ?

Just my preliminary thoughts......

Thank you

[Sapphire]

Didn't hear any more from them till a letter from Cobbetts arrived April 2007 and I've been fending them off since.

Just had an idea, there might be some more papers lurking in a case in the garage, I will go off now an take a look whilst cooking dinner.

sapphire

[Guest]

Hi Sapphire

You need to establish if the original loan was secured on any property. If it was secured then what happened to that property? If the guarantee that Les gave was not secured against a property then how was it secured?

Regarding the here and now, how much equity is there in your present home?

[Sapphire]

Hi Sapphire

You need to establish if the original loan was secured on any property. He can't remember if it was or wasn't, he says it was such a long time ago. How would we go about finding out about this ?

If it was secured then what happened to that property? If it was secured on a property then it would have been on xxxxxxxx, which was subsequently sold off and the profits divided when his marriage broke up.

If the guarantee that Les gave was not secured against a property then how was it secured? I/We have no idea at all, I had a search yesterday and can't find any more papers to do with this than those which I already have here.

Regarding the here and now, how much equity is there in your present home? I would say there is around £100 k plus equity in the house.

Right honesty time, when Les and I got together and bought this house, I wasn't able to go on the mortgage as my ex had basically buggered up the credit rating on my old house which also made mine less than perfect, so to get this house we got the mortgage in les' name only. I had to sign a document saying that I had no hold over the property (I can't remember what it was called). I remember that Lloyds took a charge on this house £30k, and there is also another charge on it for HFC Bank £10k.

Oh hell I am physically shaking here, this is getting worse and worse by the second.

[Guest]

If the loan was secured then I doubt very much that he would have been able to sell the house very easily - however, guarantees like this will only usually be "second charges" which means the primary lender would get the lions share of any proceeds of the sale - it could be that this is what happened. If xxxxxxxxxxx is now sold and now nothing to do with either of you, then it is of no importance now.

It is possible that Nat West will attempt to secure this allged debt against your house, which you should try to avoid at all costs, as they will then simply obtain the full value of what they are claiming.

You need details of the guarantee that Nat West allege has been breached and also details of how this guarantee was secured, if at all.

Does their claim detail any of this?