Separation - company director

[Champagnetaste]

Hi all, would really appreciate some help.

Earlier this year my husband and I sold our joint property and I bought a property in my name only. The reason being he had build up horrendous credit since we bought our original home. The 30k equity that we had from our first home went towards the current house (my name only).

The current home was still known as the matrimonial home.

Due to a number of reasons we have now decided to separate. He is happy for me and the 2 kids to stay in the current house.

All seems fine, apart from he has his own business and is the company director. He has dropped the bombshell that he has acted as a personal guarantor for a number of credit agreements. Won’t say how many exactly.

If the company was to become insolvent/fold. Would my current house be in jeopardy.

We are in Scotland if that has any bearing. I hope I have covered everything, if not please feel free to ask

[MarieG10]

I don't know Scotland. You are not responsible for his debt unless you were a joint guarantor but creditors might want to look at whether he deliberately got rid of assets. However, in bankruptcy I think there are protections for housing anyway

I would suggest you get some advice but not on MN

[Isleepinahedgefund]

If he were to be made bankrupt the Official Receiver might be interested in the £30k as it could be seen as an attempt to put assets out of the reach of creditors.

You won't be liable for the company debts if you personally haven't guaranteed them - you can't become liable by default and if you didn't sign the agreement yourself and have legal advice prior then the guarantee wouldn't be valid anyway.

Would be interesting to know how he convinced them he was good for the money through - a PG usually involves the lender checking that they have assets to rely on if the company folds, although this is less likely if they are trade creditors (rather than the bank).

[Collaborate]

It would all depend on why you took the £30k and didn't;t share it with him. He would have been entitled to half of that. Were some of the debts paid off at the time, and were more of those debts in his name than yours?

A trustee in bankruptcy is unlikely to take action to set aside a disposition of £15k. There wouldn't be enough in that to cover their own fees let alone the fees of a lawyer, and that's before they consider the need to pay any leftovers to creditors.

[Champagnetaste]

Thanks for answers. Yes the personal guarantee is for trade accounts.

I took the 30k as we were still together and it was the only way to have a roof over our heads. I’ll try and contact citizens advice. But I think technically I would need to give him the 15k back?

[AnchorDownDeepBreath]

Talk to a solicitor but I expect the easiest way to deal with this would be to give him his 15k share of the equity in exchange for him having no further claim on the house.

But get proper legal advice who can look into everything and see what is best before you mention that to him or anything. It's very situation dependent.