NSW Liability to Debt and Unsecured Loan - What Happens?

[Ajax]

My ex-wife and I are the two directors of a Pty Ltd company which has an overdraft debt of $20,000 with an Australian Credit Union. The company is on the verge of insolvency and cannot repay the debt which has gone into arrears.

My ex and I are in the midst of a property settlement and there is a large sum of money in our joint names (not the company's) sitting in a joint bank account. I have told the credit union that I am willing to repay their loan from this joint account but my ex will not agree. The credit union is about to pass the matter to its lawyers. The overdraft is unsecured and the two directors are not personally liable, according to the credit union.

My questions are:

1. Will the two directors have bad credit ratings recorded against their names with Veda if the matter is taken to court and judgement is made against the company?

2. What happens to the loan if the company has no assets/income with which to repay the loan?

 

[Rod]

Depends on the company creditors and what they decide to do.

Worse case scenario is having liquidators come in, sell all company assets and come after you and wife as delinquent directors and sue you both personally till the money is repaid or you both are forced into personal bankruptcy. And guess whose money the liquidator uses to sue you with - yours. Especially as they will know money is available.

Best case scenario is that you only have one creditor (the credit union) and they write-off the loan as a bad loan.

Impossible for someone from a forum to give specific advice on an issue like this. Best advice I can give is avoid having liquidators called in. You can lose total control of what happens when they enter the scene.