# Joint & Several Guarantee



## TtV2004 (2 Oct 2008)

Have a business which is about to hit the rocks so to speak. Ltd company but both directors have signed a guarantee with the bank. I understand what this means but my question is as follows. Other director will claim to be broke etc . In practice will the bank pursue me for total amount. How do they persue this in practice. Would they give loan for 50% of debt to each of us. Worked hard but other director was not as committed. In a right mess now!!!!!


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## TtV2004 (4 Oct 2008)

anyone?


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## threeticks (4 Oct 2008)

TtV2004
Have you checked the terms and conditions of your contract with the bank Im sure it will some reference to your query.


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## WaterSprite (4 Oct 2008)

If the guarantee is "joint and several" as the title of your post suggests (but you haven't mentioned it in the post itself) then both and each of you is liable.  So if the other director can't pay, then the bank can go after you for the entire amount.

I don't know how this works in practice or if the bank will try to get 50/50 from each guarantor but I'd imagine they will go after the easiest target.

Sprite


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## dewdrop (4 Oct 2008)

if your joint guarantor wont pay then the bank will seek the full amount from you


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## TtV2004 (6 Oct 2008)

Thanks for the replies. Guarantee is indeed joint & several. I know the bank can come after me for the lot. Just wondered has anyone first hand experience of this. For instance if we both agreed to take a loan for half each would they go along with this


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## dewdrop (6 Oct 2008)

from the banks point of view this would have the effect of reducing your liability by half. if the other party did not pay off the loan they would havele a bad debt for that amount. if the bank feel that both parties would pay off then they may be agreeable. In the past this would not have been regarded as good banking in certain banks..you would be asked to open a payment of guarantee account and lodge therein till your liability was met


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