Directors of limited companies may face bankruptcy if they have personally guaranteed the borrowings of the company. In a liquidation of a business, many creditors both secured and unsecured do not get their debts paid in full. Often the directors of the business have had to secure borrowings for the firm by providing their own assets as collateral. If the company cannot afford to repay the loans provided to it, or discharge an overdraft or invoice finance then the directors who agreed to pay those debts in the stead of the company will be called into do so.
It is my general experience that guarantees are often limited to set sums, for instance £25,000 or £50,000. Equally often a charge is taken …
Read the full article at: https://www.thesequitur.com/directors-bankruptcy-early-action-can-help-avoid-personal-insolvency-1705879/