Highlights:

• Claim: Bank – Personal Guarantee of £15,453 plus interest
• Security: Not secured
• Settlement: 24 payments of £400 totalling ££9,600

Background:

The Limited company was placed into Creditors Voluntary Liquidation in early 2015. A personal guarantee had been provided by Mr XYZ in respect of the indebtedness of the company.  Demand was made against the guarantor by the Bank in respect of the guarantee.  As of May 2015, the sum due was £15,543.

Our role:

Once PGUK had checked the validity of the personal guarantee documents, a full evaluation of the client’s financial circumstances was undertaken.

Once this was completed, a fully documented and evidenced proposal was prepared and submitted to the Bank with an offer of settlement.

Proposal Summary:

Income and expenditure

Mr XYZ was now in paid employment but aged 72 so only contracted for two years. Mrs XYZ was retired and only contributed to the household income by way of a small pension. Through careful budgeting with Mr XYZ’s income and Mrs XYZ’s pension the monthly household expenditure was balanced and in addition to this a surplus had been engineered in order to make a monthly payment to the bank as Mr XYZ had no savings and no possibility of borrowing or raising a lump sum.

Assets and Liabilities

The client’s assets comprised solely of his interest in the matrimonial home.

PGUK were able to argue that the value of the property at forced sale values, likely to be achieved if a sale and possession order was achieved, meant that the property would be in negative equity  (after the mortgage provider was taken into account) would result in a recovery to the Bank of nil.

Mr XYZ also had significant personal debt.

The Estimated Outcome in the event of Bankruptcy was nil.

Final Outcome:

Following many rounds of negotiation and communication, the Bank finally agreed to a 24 month payment plan being put in place.

By evidencing the asset value, Mr XYZ’s personal situation including his age and setting out the likely outcomes which could have been achieved through legal action, the Bank accepted these arguments and agreed a total settlement figure which was just 62% of the actual claim.

The claim took just 4 months to settle and with accruing interest during this period also being written off which was even an even better outcome for the client.