Personal Guarantee Consultation Guidance

Kedge Anchor Law | Personal Guarantee Consultation

The Business May End. Your Personal Obligation May Not.

A personal guarantee can create individual financial exposure even when the debt, lease, loan, or agreement was entered into for the benefit of a business.

Before signing a guarantee, restructuring a company, selling a business, or closing its doors, understand what obligations may continue and what assets could potentially be exposed.

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A Business Debt Can Become A Personal Problem

Incorporating a business can provide important protections, but a personal guarantee may create a separate obligation that exposes the individual who signed it.

  • Commercial leases and rent obligations
  • Business loans and lines of credit
  • Equipment financing agreements
  • Supplier and vendor contracts
  • Corporate credit facilities
  • Other personally guaranteed business debts

Closing The Business May Not End The Guarantee

The closure, sale, restructuring, or insolvency of a business does not automatically mean that every personal obligation connected to it disappears.

  • What exactly does the guarantee cover?
  • Is the guarantee limited or continuing?
  • Can it survive the closure of the business?
  • Does selling the company release the guarantor?
  • What happens if the business defaults?
  • Could personal assets or finances be exposed?

Know What You Personally Agreed To Before The Business Changes.

Personal guarantees can involve significant financial consequences. Reviewing the wording of the guarantee and the underlying agreement can help clarify your obligations, identify potential exposure, and determine what questions should be addressed before signing, selling, restructuring, or closing a business.

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Kedge Anchor Law Personal Guarantee Consultation Guidance
This content is for informational purposes only and does not constitute legal advice.