Independent Banking Advisory Service 

Comparison on PG Debt call for Joint and Several debt claim

Director ‘A’ - Personal Guarantee debt claim was settled on IBAS advice and negotiated to a settlement under IBAS PG membership - whilst the other two Directors (B & C) proceeded to court on the same Joint & Several Personal Guarantee debt liability claim, one using ‘DIY’ defending and the other using solicitor’s advice.

IBAS has been able to compare the result from our advice to Director ‘A’ who sought and then took IBAS advice from the start of claim on the PG against the result for the other two Directors (B & C) who had both defended the bank’s claim until Judgment was obtained against them both by the bank.

IBAS know what is possible and have the strategy for the best results to be obtained - equally IBAS know how easily banks win against individual's 'DIY defending'.

Director ‘B’ continued with ‘DIY defending’ using ‘forum type’ arguments which are unfortunately often inaccurate, unworkable or just out of date.

Director ‘C’ took a solicitor’s advice and defended the claim using that advice.

All three Directors had family homes ‘at risk’ from the bank’s debt claim from a Joint & Several Personal Guarantee liability.

IBAS obtained all the evidence from Director ‘A’ and fully questioned the bank’s solicitors on the many areas where we know a defence may have been available, provided facts and case law supported such a defence. However, our investigation over several months (and that's why IBAS provide membership for a year to those seeking IBAS advice on these matters) did not support any defence to the bank’s claim.

Once we had established that a defence did not exist to the bank’s claim on the Personal Guarantee Joint & Several liability – it was then a matter of IBAS being totally objective and factual with our member. IBAS are fully aware that defending a bank’s claim up to judgment, where a defence does not exist will also mean extra costs - those extra costs on the debt itself - may well mean the family home is lost as a result.

Therefore, we strongly advised our member to settle matters and by limiting their exposure to the bank’s claim also protect their position. As soon as we obtained our member’s agreement we started negotiations with the bank’s solicitors. IBAS continued negotiating with the bank’s solicitors on our member’s behalf and advised our members at what level settlement should be aimed.

Director ‘A’ settled after IBAS advice.

Director ‘B’ & Director ‘C’ continued to defend the bank’s claim right up to judgment - and due to this continued legal action - further costs arose.

Both Director ‘B’ & Director ‘C’ lost their defence. Both Directors received Judgments for the full claim, which inevitably included the further costs and fees for continuing their defence actions.

Both Judgments for debt will inevitably be followed by a Charging Order over marital homes, which will also add a further fee cost plus Statutory Interest on the debt (currently at 8% per annum).

However, if no payment is agreed to satisfy the Judgment Debt - the bank may also apply for an ‘Order for Sale ’ of their property. That would require the bank to satisfy the court that this is the only way to obtain payment in order to ‘discharge’ the Charging Order and that would also be the additional ‘sting in the tail’ for those continuing to defend – where defences do not exist.

Summary of result:

Director ‘A’ received IBAS's individual and specialist professional advice under IBAS membership. The results in this case show that Director ‘A’ settled after IBAS advice. That advice proved to be the most effective and for Director ‘A’ that meant not only did they save a lot of money - but also:

Director ‘A’ had the stress and worry of the bank’s claim against them removed.

Director ‘A’’s home is safe from any attack by the bank from the PG claim.

Director 'B' & 'C' both face a much larger debt (the Judgment for both Director 'B' and 'C' will mean they will each face a debt of 70k more than the settlement figure achieved by IBAS for Director 'A'). They will also face extreme pressure on their family life following Judgment and a very uncertain and stressful future!

The facts from this case prove that IBAS's individual and specialist professional advice and strategy under IBAS membership is not only valuable but extremely effective for business banking claims and Director’s Personal Guarantee ‘calls’ or debt claims and that advice and strategy may also ‘tip the scales’ for you - if you seek our help.

Any Director facing demand for payment from a personal Guarantee debt liability (please take note) can see that based on these figures up to Judgment that IBAS value in this case to Director ‘A’ is considerable – (particularly when balanced against the annual membership required by IBAS for advice to be provided under membership). The IBAS web site show some very recent member’s testimonials and these show members' views on what IBAS has done for them.

Note: The moral of this information is that IBAS can help you by providing you with individual and specialist professional advice and strategy under IBAS membership – but first you need to help yourself by emailing IBAS for help and then you may also benefit from IBAS’s 20 years of experience and expertise to your advantage and in protecting your position.

Independent Banking Advisory Service (IBAS) is a national, independent, non-profit, unique specialist banking customer membership organization which resolves banking complaints and disputes and which has campaigned on UK Banking customer issues since 1992. We provide bank and banking assessment, analysis, bank comment and content for BBC TV News, ITV, Radio and national newspapers.