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Post by transo on May 19, 2014 23:12:29 GMT
I know at various points people have cast doubts on the value of these, which I tend to share. However I thought I should share some perspective with newcomers nervously looking at downgrades, and thank the (separate) guarantors of loans 136 and 213. These two recently completed repaying their loans in full, despite the (much, in one case at least two years ago) earlier failure of the business. One of them had a few payment wobbles on the way, but the other pretty much moved directly to direct debits being paid by the guarantor and never suffered a delay in payment that I actually noticed.
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Post by yorkshireman on May 20, 2014 8:08:55 GMT
I know at various points people have cast doubts on the value of these, which I tend to share. However I thought I should share some perspective with newcomers nervously looking at downgrades, and thank the (separate) guarantors of loans 136 and 213. These two recently completed repaying their loans in full, despite the (much, in one case at least two years ago) earlier failure of the business. One of them had a few payment wobbles on the way, but the other pretty much moved directly to direct debits being paid by the guarantor and never suffered a delay in payment that I actually noticed. Yes, these are 2 honourable exceptions and presumably there are / will be others but how many have reneged on their so called guarantees?
A personal guarantee means absolutely b**ger all whereas asset security, especially bricks and mortar, tends to concentrate the mind. 
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blender
Member of DD Central
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Post by blender on May 20, 2014 10:02:06 GMT
Agreed, but we must remember that people set up limited companies precisely to protect their personal assets and we cannot realistically expect them to behave as if a business debt is a personal debt of honour. One of the attractions of FC is the 'quasi-security' of a guarantee compared with a charge on real personal assets (if there are any). The interest rates should be higher to recognise the weakness of the security.
I have experience of only two guarantees right through. On 1235 the two guarantors immediately dived into IVAs and FC soon gave up. On 1001 the guarantor had set up another company leaving the debt with the first, and FC pursued him to the courts and acheived full payment.
I doubt that many guarantors just pay up without a struggle, and FC does not have the resource to spread over the guarantors of every default. They must surely choose which ones to press hard.
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