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Limited company debt

  • souix18
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17 Jul 14 #439909 by souix18
Topic started by souix18
My husband and i are separating. We have two children, 3 and 6. We also own a house together. My husband is employed full time but also is 100% shareholder in a limited company. The company''s bank account is currently overdrawn by £9k. The overdraft is secured on the house. He has a c/c in his own name with £2k gambling on it. We have two other joint c/c totalling £4k from holidays, Xmas etc.
despite being advised by a solicitor that I do not need to pay him a penny now, I had agreed a 50/50 split of the house, giving him 25% equity now and 25% at the time I need to sell. With his 25% he receives now he would clear the business debt and cancel the overdraft secured on the house! he would clear his c/c and half the two joint c/cs. However, he is now saying that he will not pay half the joint c/cs because he is being more than fir taking away the business debt which he thinks is joint as he has purchased personal items out of the business account in the past.
I know that it is only £2k that I am fighting over, but he''d lose more if we went to court. I have been told that the split would be more like 60/40 in my favour. If I fdo fight this, how will the business debt be treated? Because it''s secured on the house will it be treated as joint? Should I just give in to the £2k now to get him out?

  • WYSPECIAL's Avatar
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17 Jul 14 #439910 by WYSPECIAL
Reply from WYSPECIAL
If you fight it chances are it would cost you both more than £2k.

You don''t say how much equity is in the house.

Will you be able to raise the other 25% when you come to sell and still rehouse yourself? If house prices rise and the mortgage gets paid down it could be a lot of money when you come to have to pay it.

  • souix18
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17 Jul 14 #439918 by souix18
Reply from souix18
At the moment we have £68k equity in the house of which I had agreed to pay him £17k now and 25% of the equity when I am able to buy him out or from a sale once the children leave full time education.
I have been advised against this by a solicitor as they said he wasn''t entitled to this much. But we wanted to be amicable and fair.
I guess I really want to know how the company debt would be treated if it did get to court? He says that the debt is ours but a company is a separated legal entity....But the overdraft is secured on the house...

  • Man38
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17 Jul 14 #439928 by Man38
Reply from Man38
Is it a limited liability company? If so then your ex is not personally liable for the debts but the bank can try to recover the debt by forcing sale of the house. What''s to stop him increasing the overdraft?

The overdraft belongs to the company, not your husband. Your husband owns the company, which may have a positive value, even with the overdraft.

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