I defaulted on a huge loan for my business, which I was the guarantor. The loan was for £20,000 to begin developing a parcel of land and build a retail park. I had other investors who in turn each pledged £20,000, and in total the cost at our end was £160,000. I under estimated what my costs were to be, we went over budget, and subsequently could not finish the project, which caused the default on the loan. In addition, some of the other investors are seeking legal action against me. Naturally all of this is distressing and keeping me up at nights.

The bank took me to court and did get a CCJ against me and now I have been contacted and informed they are going get some enforcement order to collect the money I owe. I tried to set-up a repayment plan, but the bank would not accept it. In court they said I could pay what I can afford, but I have defaulted on that agreement as well.

I own a property with my partner and it does have value, and that is my concern. Are we going to lose our home?

Any advice is appreciated.




I do understand your concerns and the stress the entire situation is causing. Any details on any legal action against you from the other investors?

If the bank has a CCJ/County Court Judgment against you, the next step or stage in attempting to collect the debt is an Enforcement Order. They could also try to make you bankrupt, which could also put your property at risk.

The risk is that a Charging Order could be issued, which in essence turns an unsecured debt, into a secured one. It also gives the bank or creditor the option to try and force the sale of a property. This requires approval from the courts, and to my knowledge and experience is very rare. I have not heard of it happening. The courts are not in the business of making people homeless.

If a creditor or one of the investors, were to try and make you bankrupt, this also puts any property with equity at risk, possibly more so than a CCJ and Enforcement Order. However, it is only your portion of any equity in a property that can be viewed, or considered. Your partner’s portion of any equity is theirs, and cannot be touched. In addition, your partner can be given the opportunity to buy-out your share to preserve the property.

I know this is a lot to take in and it is not meant to be “doom and gloom”, but you do need to be aware of what possibly could happen.

If you can keep me updated, I can advise further, and you may wish to seek legal advice as well.



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