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Imagine you're in business with a partner. The company took out a business loan some time ago but the bank never asked for any personal guarantees from either of you. The company's doing ok but you've been a bit unhappy for a while. You disagree about the direction you want to take things in. You eventually decide to strike out on your own.

Your partner says he wants to carry on the company as before. Same name and set up, just without you. You invested some capital years ago and you've contributed a lot of time, skill and energy too. You have a bit of negotiation with your partner about who's contributed what and how best, for you both, to divide up the company's assets. The deal you agree involves the company making you a payment in settlement of your interest in it. The company will remain liable for all its debts and, equally, after the payment is made to you, you'll have no claim on its assets. It's largely to be a clean break but you both agree that a good way of structuring things, as part of the swings and roundabouts, would be for you to pay something each month to the company to help it pay off the business loan. The company makes its payment to you, you leave and set up your own firm. As you promised, you set up a standing order for the monthly payments.

Imagine the same, but less amicable. You've ploughed money into the company and worked for it for years. However, your partner says that if you want to leave you can. It's just that you'll have to say goodbye to all your money and the company's assets. He's not happy about your plans. Not happy at all, after all he's done for you. If you want to leave, fine, but don't imagine he'll pay you a penny. The assets are the company's and if you want to leave then great. You'll just have to take the consequences. He's not bullying you, he's at pains to stress, before you start. It's realpolitik.

This all seems wholly unfair to you. You're frankly a bit taken aback. You thought you'd been perfectly reasonable and had offered a fair and practical way to manage the parting, one that would be best for both of you. However, you see there's nothing you can do. You can't force your partner to be reasonable. So, you reluctantly agree but say that if that's the deal then you won't be paying anything to him to help him meet the company's obligations to the bank.

In what possible sense does this involve you "defaulting" on any debt?