HSBC Business Loan with Personal Guarantee

[Alex Norton]

Hi
My stepson had a loan with personal guarantee for £40,000 with HSBC. Due to Brexit & then Covid the business had to close in 2020 and went into voluntary liquidation. Total loans to the bank were £180,000 also with a PG which the other directors paid off by selling up their house, plus the £40,000 which my stepson signed for but NOT with a security on his house. Subsequently a statement of means was requested by HSBC and my stepson who had very little income agreed to pay them the £100 a month that he had spare after all expenses. This payment continues to this day. The bank are now hounding him to pay and have added interest to the £40,000. In a phone call they told him he now owed them £100,000 ! causing him to go into a deep depression and wanting to commit suicide. My stepson has been ill and taking medicine for depression since the problem started. In a subsequent phone call last week HSBC then said he did NOT owe the £100,000 but rather £43,000 ( £40k + £3k interest). He asked if they would accept a charge against his house as security but they said that was not likely and that they wanted the £43,000 but might accept £40,000 cash. My stepson is desperately worried that they will force him to sell his house to pay them and as he works from a home office and workshop this would mean he could no longer get an income. I am extremely worried that he might do something stupid as a result of the massive stress that he is under, and I don't know what to advise him moving forward. If anyone can anyone help I would be very grateful please ?

[atticus]

This needs careful consideration of your stepson's full circumstances. It will not be easy. Banks tend to squeeze for as much as they can get.

Is he in a position to raise cash by way of additional mortgage - which he can afford to repay?

Are you in a position to help? Sometimes banks will settle for less than the full amount if cash is demonstrably from a third party.

[Alex Norton]

This needs careful consideration of your stepson's full circumstances. It will not be easy. Banks tend to squeeze for as much as they can get.

Is he in a position to raise cash by way of additional mortgage - which he can afford to repay?

Are you in a position to help? Sometimes banks will settle for less than the full amount if cash is demonstrably from a third party m

So kind of you to reply to this, I am very grateful. My stepson is looking into trying to raise cash by way of additional mortgage but this may be difficult due to expenditures just about equalling income at the moment. Having paid out £180k to HSBC and having sold my own house to do it, I am now strapped for cash and cannot loan him the money. His biggest worry is that HSBC may force a sale of his house - is that likely to happen do you think ?

[atticus]

You have said that HSBC does not have a charge over the house. This means that to force a sale of the house, HSBC will have to sue in order to get a judgement, and then seek a charging order. That all takes time and money. I suggest that to prevent that, your son keeps talking to this bank trying to work something out.

[Alex Norton]

You have said that HSBC does not have a charge over the house. This means that to force a sale of the house, HSBC will have to sue in order to get a judgement, and then seek a charging order. That all takes time and money. I suggest that to prevent that, your son keeps talking to this bank trying to work something out.

Once again thank you so much for that. It confirms what I had thought and I am urging him to keep talking to the bank to try to work something out. If I may, I will let you know how we get on.

[atticus]

One very important reason to maintain communication is to avoid this bank feeling that there is no engagement and that it will have to take legal action.

I have in the past represented clients in your stepson's position, and from that experience I can say that when HSBC decides to go to court it can be very tough.

[Manxman]

So kind of you to reply to this, I am very grateful. My stepson is looking into trying to raise cash by way of additional mortgage but this may be difficult due to expenditures just about equalling income at the moment. Having paid out £180k to HSBC and having sold my own house to do it, I am now strapped for cash and cannot loan him the money. His biggest worry is that HSBC may force a sale of his house - is that likely to happen do you think ?

Apologies if I've got this wrong, but wasn't £180,000 the TOTAL amount owed to the bank according to your opening post? Is your stepson's £40k on top of that?

Presumably you were also a director/personal Guarantor?

[atticus]

Yes, that had me puzzled as well. Post no 1 suggested the 180k was paid by someone else.

[PallasAthena]

Churajnin is a spammer advertising a US loan site. Post reported.