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Buachaill, Barrister
Category: Law
Satisfied Customers: 10536
Experience:  Barrister 17 years experience
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I owned a property in the name of a company. The property

Resolved Question:

Hi I owned a property in the name of a company.
The property was a new build and I obtained mezzanine finance to which I gave a personnel Guarantee.
The house did not sell and the Mezzanine lender appointed an administrator. This was last November.
Since then they have not marketed the house , but the mezzanine lender has served me with a notice under the PG.
To repay all the debt, as they have removed any possibility of me obtaining this money by not marketing the house am I still liable under the PG?
Submitted: 10 months ago.
Category: Law
Expert:  Buachaill replied 10 months ago.

1. Dear *****, I regret to say that you are still liable under the personal guarantee. This is because there is no onus on a financial institution or any person holding a guarantee to look to their other remedies against the debtor or his property in order to gain recovery of any sum. This means, in practice, that any lender can simply look to the guarantee for repayment and not bother with seeking to sell any property they might have security over.

Expert:  Buachaill replied 10 months ago.

2. You need to realise that personal guarantees are lethal instruments. They put you under an obligation to repay irrespective of any other circumstances which might intervene. So, the fact that the administrator and the mezzanine finance lender have not done anything in relation to marketing the guarantee does not help you one bit. It does not remove or diminish your liability under the guarantee.

Expert:  Buachaill replied 10 months ago.

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Customer: replied 10 months ago.
Thanks for that (I think) . So before the administrator was appointed the house was being marketed for sale with the knowledge and support of the first charge lender , the administrator removed the property from the market. So are you saying that the keep the property and make me bankrupt in the process?