Company cross guarantees

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Unless companies are in the same group of companies, it proves difficult for banks to enforce inter-company cross guarantees. The question is, what sort of consideration would a third party gain from making such a guarantee?

Each case always has to be considered on its own merit but it is an important issue, so get good advice so you can be sure of your ground.

For more information, take a look at our website personal-guarantee.co.uk, or give us a call on 0845 055 8457 0845 055

 

Mainstream bank centres for dealing with Personal Guarantees

In each of these blogs, I will try and provide some insights into how the institutions such as banks approach their calling in of personal guarantees.

Most of the mainstream banks have centres that deal with the chasing of personal guarantees- so although the local manager might send the initial demand letter and try to negotiate a repayment plan, they have little authority to do a deal and will often suggest taking an interest bearing loan.

An agreement at this stage would be a result for the bank, but certainly not for the person who signed the personal guarantee!

However, the longer the matter is being dealt with at this level, the more time the personal guarantee holder buys themselves, so don't be in too much of a hurry to move it on to the banks' centre! And remember, many personal guarantees are at best dubiously enforceable and many are not enforceable at all.

For more information, take a look at our website personal-guarantee.co.uk, or give us a call on 0845 055 8457 0845 055

HSBC- how they operate.

In the last 15 months or so, we have seen a department allegedly based in Canary Wharf but actually based in India manage collections regarding PGs- the long Indian names and .in email addresses tend to give them away. However, they are difficult to contact and relatively slow to respond, which is great under normal circumstances if you are fighting a war of attrition but dreadfully frustrating if you actually want to do a deal. We have seen a recent move by HSBC to use their internal Birmingham based resource, Metropolitan Debt Collection Services and DG Solicitors, but again find they can be just as ineffective in pursuing on behalf of the bank. For more information, have a look at our website at www.personal-guarantee.co.uk

Lombard Leasing

This leasing arm of RBS has proved difficult for assessment with any consistency. Lack of consistency in pursuing personal guarantees can work in your favour. However, along with other leasing companies, many personal guarantees often don’t stand up to scrutiny, are integrated into finance agreements and aren’t clear enough as to the parties involved.

 

For more information, have a look at our website at www.personal-guarantee.co.uk

HBOS - how they operate when enforcing personal guarantees 2

As noted in the last blog with regard to HBOS, the lending policy of HBOS was very aggressive. It’s symptomatic of an institution that is going hell for leather for market shares by sacrificing some first principles of lending.

 

There has been particular comment in the press about the lending practices of the Reading business centre of HBOS, where it is alleged that customers were encouraged to take up facilities they did not need or indeed, under normal scrutiny, could not justifiably afford. This all adds grist to the mill when challenging the validity of a personal guarantee or the funding that it relates to.

 

For more information, have a look at our website at www.personal-guarantee.co.uk          

Communication with banks and debt collectors 3:

Avoid email communication at all costs; imagine you are a ‘tick the box’ jobs-worth at one of the banks central departments. Five emails in one day can be the equivalent of ticking three months worth of correspondence by snail mail.

 

It can be forwarded off their list and straight to their solicitor to deal with.

 

Emails are also notoriously unreliable; (not that normal post is much better) with today’s virus scanners and ability to be lost in a myriad of emails, there is no guarantee of delivery. Fax and guaranteed delivery posts are your safest form of communication.

 

For more information, have a look at our website at www.personal-guarantee.co.uk

Lloyds- how they operate when enforcing personal guarantees 2:

Lloyds do struggle with personal guarantees. For example, we have seen them use an "abbreviated" form of personal guarantee; you would have to wonder in what circumstances it would be appropriate to not use the full version.

 

Lloyds used to have the reputation of referring to solicitors more, however have not been as immediate more recently; but as more personal guarantees are being collected, the pressure is on, so there may be change.

 

For more information, have a look at our website at www.personal-guarantee.co.uk