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Max Lowry
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Category: Bankruptcy Law
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Experience:  LLB, 10 years post qualification experience
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I gave a personal guarantee to a company supplying a limited

Resolved Question:

I gave a personal guarantee to a company supplying a limited company that I was the director of - the guarantee was for a credit limit of upto £20K The limited company went into receivership owing that company £56K.,  I formed a new company and the creditor re-invoiced the new company the £56K (as I recall I signed a second guarantee for £20K under the new company)  - which £44K has been being paid off and is now down to about £12K My question is whether or not the Personal Guarantee is valid as it was only for £20K in the first instance

Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  Max Lowry replied 2 years ago.
Hi, welcome to the site. My name is ***** ***** I will help you with your question. I'm not 100% sure of what you are asking but I think I understand your question. The first guarantee will remain valid despite the company going into receivership and if it was not released by the company who asked you to sign it. You could check the terms of that guarantee to see if it lapses and in what circumstances such as insolvency of the company - this kind of release is unlikely but it is worth checking. Also I'm not sure why the company re-invoiced newco the full £56k when that was a debt of oldco which went into insolvency - maybe you agreed for this to happen as the company debts usually die with the company unless for example there is a personal guarantee like there is here. It seems from what you have said that your total liability was £20k under the first guarantee plus the £20k for the new guarantee.
If I can clarify anything please let me know.
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Category: Bankruptcy Law
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Experience: LLB, 10 years post qualification experience
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