Advice for homeowners with business debts

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Updated: 11th January 2021

Can I lose my home due to business debts?

In the majority of cases, there is no risk to your home as a result of having business debts. As the director of a limited company, your personal assets and finances are offered some protection by incorporation. Having said that, there are certain instances where the ‘veil of incorporation’ can be lifted.

As director of an insolvent company

You, like many other directors, may have signed a personal guarantee for your company’s borrowing. If the loan was secured on your home and the company is unable to keep up repayments, the bank may decide to call in the guarantee.

It is often the case that better and more affordable terms can be negotiated, however, by way of a Company Voluntary Arrangement (CVA) or other formal insolvency route. If a CVA is appropriate, you are protected from further creditor action as long as the newly agreed repayments are met in full and on time.  

Lenders often respond positively to the intervention of insolvency professionals. Having someone qualified on your side can also ease your own worries, and make the entire problem more manageable.

What about self-employment? Are your risks increased?

If you are the sole proprietor of a business, and don’t have the protection of limited liability, your exposure to risk is greater. But again, as long as you seek professional advice early on in the process and don’t ignore mounting financial problems, there’s a good chance that your personal property won’t be affected.

If the situation becomes so bad that you have to declare bankruptcy, then your home may be at risk, but there are still many options open to you before this position is reached. Some people assume that insolvency advice is only available if the situation is untenable, but the truth is that seeking guidance as soon as you experience financial difficulties is the best way to avoid insolvency.

We have an extensive network of 100 offices offering confidential director support across the UK. You can speak directly to an insolvency expert, and receive reassurance about your current situation.

We have professional contacts with a range of lenders throughout the UK, and may be able to arrange finance on your behalf. From traditional bank loans to crowdfunding options, our advisors can recommend the best type of finance for your business, and end these debilitating worries about losing your home.

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Keith Tully


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Director Support - Business suffering from Cash-Flow Problems?
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