What Happens About Personal Guarantees In A Liquidation?
If you have signed a personal guarantee and at the time of a company going into liquidation there is an amount outstanding, you will be called upon to satisfy this debt under the terms of your personal guarantee.
It is always advisable to make sure that you have details of any personal guarantees that you have given, in order that you may have them checked for validity and understand the terms of repayment.
Personal guarantees come in all sorts of forms and therefore, it is important that proper advice is taken as to whether a guarantee has been entered into correctly by all parties in establishing its validity.
Some lenders and asset providers may insist on personal guarantees before they will contract with the company and the onus is on the person signing the guarantee to make sure they understand what they are signing and the implications that may arise if the guarantee is called upon.
In addition, it is important that the party requesting the personal guarantee makes sure that they adhere to the strict regulations required in requesting a person to sign a personal guarantee.
It is always advisable to take legal advice when entering into personal guarantees and you should be aware of what you have signed and who you have given guarantees too.
If in doubt, speak to the insolvency practitioner and he will be able to give you an indication of where you should go to obtain the advice that you need.
The worst thing that you can do is ignore a personal guarantee and let yourself be chased by the creditor, as this will result in interest mounting up and potentially, aggressive debt collection procedures following on.
If you are proactive and contact the creditor who has the personal guarantee, there is often the ability to come to a reasonable settlement that is both affordable and sustainable in satisfying the outstanding debt.
Again, speak to us, as we have a lot of experience in assisting people in resolving personal guarantee positions.