Business Debt and Personal Guarantees – Options that Protect your Assets
At Don’t Fret About Debt we are on hand to help you take back control of your finances and can offer options to business owners with personal guarantees that protect your assets.
Business owners who have signed personal guarantees are responsible for paying the business debt back if the business can’t. This often means that a business owner’s home is at risk from legal action by a creditor, such as a petition for bankruptcy (Sequestration).
As is the case for many of our clients over the last 18 months, restrictions on trading as a result of the COVID-19 pandemic have led to many businesses struggling with debt repayment. Both business lenders and suppliers are keen to recoup the funds due to them. Often the easiest way for a creditor to do so, if the company cannot repay the business debt, is by enforcing the personal guarantees provided when the loan or credit agreement was signed.
If you are being pursued by a creditor and even if the process has already started, you can still contact us for advice, and we can help protect your assets.
We will work with you, advising you on all your options to help you decide on the best way to deal with your business debts. Our debt advisors can help with your debt by setting up an affordable monthly payment based on your income and household expenses.
In two of our recent cases, we have protected the homes of clients with debts totalling around £400k each by advising on the options available and putting in place debt solutions tailored to each client’s circumstances.
Where a reasonable repayment offer can be made to your creditors, we can offer a Debt Arrangement Scheme (DAS) to protect your home or other assets, freeze interest and charges, and prevent arrestments from your income or bank account.
If you can only afford a small repayment at this point, there are still options available to you. We may be able to get a DAS approved under the new ‘Low & Grow’ process put in place during the pandemic. This allows you to start with a small payment if you expect that your circumstances will improve within the first six months of the plan. Following these six months you will then be able to increase the repayments to a more realistic level if your circumstances have improved.
Our experienced debt advisors can provide advice on all statutory debt solutions in Scotland and if you opt for a DAS you will not pay any fees. Under the legislation covering the Debt Arrangement Scheme the fees for running the plan are covered by your creditors.