Can a bank enforce legal action after they issued a close corporation and the person who signed surety a Sec 129? And the person immediately acted and exercised his options in terms of a Sec 129 and applied for debt review?
Thank you for the question.
A close corporation cannot be placed under debt review. The bank is fully within their rights to pursue legal recourse.
When it comes to the natural person who signed surety, the person has a right to apply for debt review, in which case the bank cannot pursue legal recourse at will. They would have to participate in the debt review negotiations in good faith.
If a person signed surety, that liability – which was for a juristic person – becomes a personal liability and must be incorporated into the affordability and means of the natural person.