Statutory demand on personal gurantee

[ramk]

Hi All

I have given a personal guarantee on a settlement agreement on behalf of a company I own together with a few friends. The Agreeement required the company to pay the creditor £20,000 by the 1st of May 2015 and the company has given a counter proposal to settle the debt in a few instalments. Rejecting the counter offer, the solicitor of the creditor has served statutory demand to both myself and the company separately. (two demands). My understanding is that i would only pay the amount if the company refuse to pay or fail to pay and then I would get some time to pay.

The terms I signed is as follows.

"xxxxx (my name)" agrees to provide personal guarantee that if the company fails to pay the sums referred above, then xxx (my name) will pay, on demand, the money due to Mr x ( creditor) by the company. The guarantee will not be reduced, discharged or otherwise affected by any variations, part payment or extension of this agreement of any other arrangement between the parties or any dispute between the parties."

Can someone help what I can do? Can I request the court to set aside the personal demand while the company deals with it?

Thanks and look forward to some useful answers.

Thanks

[des8]

Re: Statutory demand on personal gurantee

Could you post up a complete copy of the agreement?
We are currently discussing some one else's guarantor problems and if you read that thread it will give you an idea of the difficulties that can arise if the agreement (deed or contract?) isn't correctly drafted.
Read this thread here: http://www.legalbeagles.info/forums/...ht=#post542249

Oh! Hi and welcome!

[stevemLS]

Re: Statutory demand on personal gurantee

I think this is a little more pressing than the other one given that you have been served with a stat demand which, as no doubt you know, is a precursor to bankruptcy.

Do you accept that the debt is owing?

Can the company not settle the debt?

[des8]

Re: Statutory demand on personal gurantee

Agree more pressing in time is short to defend an SD.
However if you can show the Guarantee is faulty and therefore unenforceable, wouldn't that be a defence to the SD?

[Crazy council]

Re: Statutory demand on personal gurantee

arguing points when a stat demand is in the pipeline can eat up valuable time.

Are you and the company jointly liable ? ( i presume so ), then unless the agreement specifically excludes it, they can go for iether or both ( as they have ).

My understanding is that i would only pay the amount if the company refuse to pay or fail to pay and then I would get some time to pay.

The creditor can really push for the BO once they have the stat demand, and i suspect the the following would be expected,

Creditor goes for the most viable ( u if you have proffit in your home or savings, unless the company has assets. )
You then make any claim against your company to get any assets.

All depends on the agreement, but, if the easiest route is to go for u, they will.

[stevemLS]

Re: Statutory demand on personal gurantee

Agree more pressing in time is short to defend an SD.
However if you can show the Guarantee is faulty and therefore unenforceable, wouldn't that be a defence to the SD?

Afraid I don't know.

Answering purely to bump and hope someone who knows what they are talking about is around!

[ramk]

Re: Statutory demand on personal gurantee

I think this is a little more pressing than the other one given that you have been served with a stat demand which, as no doubt you know, is a precursor to bankruptcy.

Do you accept that the debt is owing?

Can the company not settle the debt?

Hi thank you for your message. I do accept that the debt is owing and the company is trying to settle this debt. The company has offered an alternative instalment option to settle the debt as we are a start up company and unable to pay it in full until the investors give us the money. Can they still go ahead and press for bankruptcy if the company is genuinely offering them a payment option?

[ramk]

Re: Statutory demand on personal gurantee

arguing points when a stat demand is in the pipeline can eat up valuable time.

Are you and the company jointly liable ? ( i presume so ), then unless the agreement specifically excludes it, they can go for iether or both ( as they have ).

All depends on the agreement, but, if the easiest route is to go for u, they will.

Hi thanks for your comments. It's not really a joint liability. What the agreement states is that if the company fails to pay I would pay the money on demand. As far as my situation, I don't own a house and have no savings at all and the company will certainly be in a position to pay this off within the next 3 months as we have an intent from an investor to pay us the money. Do you think I can ask the court to set aside my personal SD stating that the company is trying to settle the debt?

[stevemLS]

Re: Statutory demand on personal gurantee

OK, despite my lack of knowledge on this particular issue I will have a go,

Whilst my understanding is that the making of a bankruptcy order is almost a rubber stamping exercise by the court, there will still be an element of judicial discretion.

In circumstances where a debt is admitted and where the company is making genuine efforts to repay the debt in a reasonable period, my view is that this would be a fairly strong argument why a bankruptcy order against the guarantor should not be made.

As I have said before, though, this is not my area and I am applying the ordinary rules of equity.

Have a look at part IX of the Insolvency Act 1986 which sets out conditions to be satisfied before a bankruptcy order can be made but also seems to me to fetter judicial discretion.