Independent Banking Advisory Service
Established in 1992
Received Bank Personal Guarantee Debt Claim Demand?
After 25 years of business banking 'case work' and investigations we know that nobody has a 'formula for guaranteed success' with banks on business bank debt claims. But knowing what can be achieved from the IBAS strategies developed and finely tuned over 25 years means that IBAS can 'shorten the odds' for you with your claim.
2018 - emailed testimonials to IBAS recently stated: ‘IBAS assistance was extremely helpful, knowledgeable, decisive and effective, I achieved maximum benefit from your unique information service at much lower cost than from any solicitor I’ve used previously.’ - CS
& JE (IBAS member since 2011) recently emailed and said: You are like our security team and we will always want to have you guys around..just in case - the trauma of our experience is always there and without you who knows where we would be today?
- what you should not do.
A personal guarantee is an agreement made between an individual or individuals which means that if they act as a business director they then take a level of responsibility for their company's debts in the event that they cannot be paid back by the business or company itself. If a claim is made under the personal guarantee, the director will be liable to pay the company's or businesses debt and the partner, proprietor or company directors' personal assets may be at risk as they become liable for the relevant business debt that is covered by the guarantee.
It’s not unusual to see Company borrowings being used to threaten business ownersʼ homes. Many IBAS members have provided banks with their Director's Personal Guarantee to ʻsecureʼ or cover the borrowings for their individual companies. However, they found that after demand and company liquidation/dissolution the Bankʼs debt recovery officers threatened them verbally (over the telephone) with: “if you do not provide proposals we will repossess your homeʼ.
Over many years IBAS has received numerous enquiries from sole proprietors, partners, business owners and company directors who received bank demands for payment. Many of those enquirers reacted to the bank's demand letters by telephonng the bank's debt recovery officers first thinking it was a wise thing to do - but because of that phone call ended up much worse off from their experience.
In many cases that one phone call immediately created a much larger debt problem as the bank then issued a legal claim with costs and also gained judgments for the debt and then created charges over properties.
Banks still continue to ʻthreatenʼ customers verbally - because itʼs very effective. They know that any proposal made in haste or in fear will effectively eliminate all defences for the customer and provide the bank with a direct route for a legal claim - even though defences were available before those proposals.
If your business has been or was forced into Lloyds Bank Business Support Unit, Royal Bank of Scotland/NatWest bank/RBS Global Restructuring Group (GRG) unit or HSBC Specialized Lending Unit - we know how they operate and how false defaults are engineered - lawyers do not have that specific experience or IBAS knowledge from such cases. It is also now documented that Mandatory referrals and transfers to such units were required by those banks and that any 'breakdown' of the customer relationship (whether engineered by the bank or not) was used to refer businesses to such units and that even the questioning of bank charging by the business was enough to 'trigger' the bank moving that business to what are effectively 'debt recovery units' and building up penalty fees and charging rates to drive up the debt then being claimed - so contact IBAS with your case details and let us know whether your company is still trading - or been forced into insolvency by the bank.
Business Support Units, Specialized Lending or Specialist Relationship Managers are all terms used by the banks for those brought in to 'rip off' businesses by forcing or 'triggering defaults' - which forced businesses into insolvency situations where the bank could then plunder the cash flow and assets.
Or telephone (during office hours only) on 01487 843444 for confidential conversation
A bank debt recovery officer’s first priority is to make you believe you should make a proposal to pay - which then means you have accepted the debt is owed, that it is accurate and also totally correct - otherwise, why would you offer to pay anything?
Having got to that position very quickly (because of the customer's telephone call) the bank can then enforce legally on your assets very quickly.
Banks know that customers ʻringing inʼ are ʻfair gameʼ for intimidation as they are usually unprepared for the bank's slick questioning strategy. This opportunity provides the bank with the perfect position in which to make the customer provide hasty proposals to pay - regardless of any possibility of defences against the bankʼs claim or a defence against the excessive amount being claimed. - So:
Number 1 on what not to do when faced with a bankʼs business debt claim or Personal Guarantee debt Demand - is do not make a phone call to the bank – nothing good can come from it for you in our experience!
If you had seen (as we have at IBAS) just how many bank customers telephoned the bank first and then gave away all their defences and also made hasty proposals to pay - without seeking proper assistance - you would know that not accepting the debt or making any proposal to pay is plain ʻcommon senseʼ when you have only just received a claim on your PG.
However, if you are one of those people who is content to lose your property quickly and also pay premium rates to the bank in doing so - then pick up the phone. The bank will be extremely happy to take your money – they always are.
Number 2 on what not to do when faced with a bankʼs business debt claim or Personal Guarantee debt Demand - is ‘bury your head in the sand’ - seek immediate professional help to ʻproperlyʼ deal with the bankʼs demand. You will then worry less and sleep better at night by knowing you have done the right thing and handed matters onto someone who deals with these matters daily and has many years of PG Debt Claims experience.
Until you have gained the ʻcorrectʼ assistance and been properly advised no proposals should be made or even contemplated.
IBAS aim to provide good specialist advice and resolution before litigation if possible but if IBAS is involved immediately after demand for payment by a bank, our aim is to gain all information which we know is necessary to assess legal arguments - against existing case law. IBAS lay the 'groundwork' for successful defences or banking claims by first preserving any defences which then exist and yes, we have assisted in many cases which have been won by our members after litigation in the County Court, High Court and the Court of Appeal. So, IBAS experience and knowledge will be extremely important in supporting any business banking customer in dispute with their bank.
- See information below on case with IBAS member Keith Elliott - where the bank is seeking payment from his personal guarantees:
Lloyds and PwC face £55m court case from motor dealer who says the firms forced it out of business Lloyds Banking Group and accountants PwC face a £55m legal battle with a motor dealership which will allege they colluded to force it out of business.Yorkshire-based Premier Motor Auctions will argue Lloyds used its Business Support Unit as a profit centre to extract money from struggling firms, according to the Sunday Telegraph.Premier, led by chief executive Keith Elliott, went bust following a failed sale of the business in April 2008. The firm will allege it was the victim of a plan to push bank staff to increase profits as the financial crisis hit. - 25th February 2018 - City AM
Number 3 on what not to do when faced with a bankʼs business debt claim or Director's Personal Guarantee debt Demand - is do not make requests for information i.e. Personal Guarantee copies. - Whilst the bank will of course willingly provide all they need to make their claim ʻstickʼ they will not provide what you need for you to be able to defend against their debt claim - professional assistance is required to properly assess what should be obtained from the bank - and why.
Obtaining a copy of the personal guarantee alone is not enough. If your advisors say that it is all you require - then you should immediately find another advisor who is properly experienced in these matters - before it's too late.
If your advisor suggests making a token payment to keep the bank quiet - then you should immediately find another advisor who is properly experienced in these matters - before it's too late - because making a payment will just accept the debt claimed by the bank and also provide the bank with an easy route to your assets.
Number 4 on what not to do when faced with a bankʼs business debt claim or on your Director's Personal Guarantee debt Demand - is do not use forums if you are attempting to seriously protect your home from attack by the bank after you’ve received a personal guarantee demand claim. - Forum ʻdefenceʼ material is notoriously dated, usually innacurate and may be very dangerous. Much of the forum information is out of date or superceded and is often just one person’s ‘untested opinion’ whereas courts now expect defence material to be complete, professional and full when filed into court - that means supported by current case law not 'theories' without factual foundation.
A poorly presented defence will immediately ʻinviteʼ a ʻstrike outʼ from the bank's solicitors with an application for all costs and a charge over property (if Land Registry showns you own property – whether solely or in joint names) without you getting near a courtroom. In some cases the bank will apply for an order for sale - which also means the bank will control the sale of your home – all of that can happen in a matter of weeks if an amateur DIY defence is filed.
When IBAS investigates business banking ʻcasesʼ our investigation/s focus not only on the debt being claimed by the bank but also whether the Bankʼs actions in all matters has been correct. There are a number of different ways IBAS can/will question the bankʼs actions and obtain information. IBAS investigations and investigatory experience with audits and interest overcharging since 1992 has led to many bank claims being considerably reduced or completely dropped.
If IBAS is ʻon your caseʼ quickly enough (preferably, immediately a demand has been received) we will then be able to gather all the information which we know is necessary to properly investigate all matters, which will then establish the ʻtrue factsʼ before the bank ʻclears their decksʼ (which will occur after company liquidation if not before). Once company insolvency or liquidation is in progress the banks will then attempt to prevent discovery of what is often essential documents.
Please Note that: Banks will only provide those ʻfactsʼ which enable the Bank to make a maximum claim and obtain total recovery and all their costs from your assets. - That is why they make substantial profits from debt recovery. When bank customers ʻmake it easyʼ for them the bank will take all they can take - whether it is fair, moral or legal.
Banks and Bankers will ʻbend the rulesʼ for the bank. Bank debt Recovery staff are not employed to advise Bank customers - bank business customers need truly independent professional and specialist advice before any proposals can be made or should be made.
IBAS acts for IBAS members by protecting them from the bankʼs often ʻhostileʼ intentions.
We also protect our member’s assets from being ʻraidedʼ by the bank or in some cases by completely nullifying a bankʼs claim, whilst reducing bank claims or expectations in others.
We do not accept any member without full knowledge of their position and what has occurred with their bank. Membership is only offered to those who will benefit from IBAS guidance or direct involvement which is determined by IBAS after email 'conversations' have passed between us to establish the facts and position.
We believe IBAS is the most economical, professional, confidential guidance and direct assistance organisation available for UK Business banking problems and disputes, up to and including litigation. IBAS experience has proved to be the deciding factor in effective and sometimes almost miraculous settlements for business banking customers. What do you require from your advisor? Tell us what you are seeking by emailing us and we will respond to you in a no obligation and confidential 'conversation'.
Last modified: 6th April 2018