Are Directors personally liable for company debts?
Directors Personal Guarantee
Are Directors personally liable for company debts? To begin with, at the height of the business boom, banks were often very happy to provide loans to companies.
This agreement stated that in the case of the company being unable to repay these loans:
- the signer, or
- the guarantor would be personally responsible for the repayment.
For instance, with Coronavirus and lockdown procedures:
- Companies are finding themselves in difficult positions, therefore
- Lenders are entitled to pursue Bankruptcy against the Guarantor if they can not make repayments.
What if I can’t pay?
- If you signed a personal guarantee for your limited company, and
- Both the company and you fail to keep up with repayments this means:
- Your lenders will pursue you to recover the outstanding debt.
Going straight to an Insolvency Practitioner, you will find they are legally obligated to get the best deal for your lenders.
What do I do next?
Most importantly, there are always options therefore you don’t have to face the stress and uncertainty of being liable for repayments by yourself.
In addition to the above, Bell & Company, as pre-insolvency consultants, specialise in helping people like you.
As an example, we have numerous success stories helping clients who were being pursued beyond aggressively by lenders and creditors start fresh.
To conclude this weeks blog, check out our latest webinar regarding the issues surrounding Personal Guarantees and the exposure to many SME business owners.
Especially now more than ever because of this current Coronavirus / COVID-19 pandemic.
Hosted by our Chairman Terry Bell who has provided:
- Lots of insightful information, and
- Tips that Business owners can utilize to protect themselves and their assets.
Are Directors personally liable for company debts