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What can happen to a guarantuar

  • 31-01-2011 12:11am
    #1
    beanie10
    Closed Accounts Posts: 466 ✭✭


    Hi lads,
    I hope someone can help me out on this one. I acted as guarantuar on a company loan 5 years ago. On this credit application the company owes €6,000 approx which is being paid off on a monthly basis. Recently the company that is owed the money has started writing to me about starting court proceedings and that i will be responsible for interest charges and legal costs. They are also going to ruin my credit record and publish it in some gazettes. Where do I stand on this considering that the debt is acknowledged and being paid off every month unlike other debts this company is owed. I simply do not have the money to pay this off at once.
    Any thoughts are welcome. Thanks in advance


Comments

  • #2
    coylemj
    Registered Users, Registered Users 2 Posts: 25,626 ✭✭✭✭coylemj


    My understanding is that if the terms of the loan are being complied with i.e. if the repayments are being made according to the agreed schedule then the guarantee cannot be 'called in'.

    However.... it all depends on what's in the guarantee. There may be a provision, for example, that if you or a director of the firm is convicted of theft or fraud then the loan can be called in, there may be a similar provision if the company falls two years behind in furnishing audited accounts to the company's' office. What might have happened in your case is that there was a judgement against the company for some other debt and now your lender is getting cold feet and is trying to call in the loan.

    Read the guarantee you signed.


  • #3
    beanie10
    Closed Accounts Posts: 466 ✭✭beanie10


    No other judgement against the company and this is the only money the company owe. Times are slow so payments are slow but we are going to pay the debt on a monthly basis unlike some other debtors, Are they just making empty threats or do they have a case seing as we are paying more than a judge would order us to pay?


  • #4
    Reloc8
    Closed Accounts Posts: 2,857 ✭✭✭Reloc8


    Depends.

    You're saying we are going to pay the debt on a monthly basis - is that the terms on which the money was loaned ? If so, should be no problem. If not, the creditor can decide to call in the loan, more or less, and enforce the security, including a guarantee.

    You seem to be saying that you're proposing to pay back more than a judge would order you to pay - but you don't get to unilaterally alter the terms of the loan (e.g., I borrow 10,000, to be repaid within 3 months. I propose instead to repay 15,000 but spread over 4 years, the creditor does not have to accept this).


  • #5
    Our man in Havana
    Closed Accounts Posts: 29,473 ✭✭✭✭Our man in Havana


    If the matter were to get to court a judge could impose conditions against the will of the creditor.


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