With the uncertain economic climate many companies are requesting a Personal Guarantee (PG) against many credit accounts/leases etc. Once this is signed it means that the director of the Limited Company is no longer protected against debts if their company fails. Signing a Personal Guarantee (PG) can be very, very risky – especially if the director has assets such as a house.
Companies offering credit are feeling the pinch at the moment, a Personal Guarantee further ensures that they will not be out of pocket should the Limited Company fail. If a director signs a Personal Guarantee and their business diminishes then the company will pursue the matter through the court to fulfil the debt. There are various routes that they can go down such as a charging order, interim order or bankruptcy.
Prior to signing any agreements you need to seek professional advice, this is to ensure that you are protected. We see many people who have unwittingly signed agreements with Personal Guarantees (PG) – once the agreement has been signed there is not much that can be done about it. It is imperative that advice is sought prior to signing.
If you need assistance with any agreements or if you have a Personal Guarantee which is currently being enforced then do not hesitate to contact us.
It is now possible to insure your Personal Guarantee if required to provide one. The personal guarantee insurance pays out in the event that the business becomes insolvent and the PG is called
cva, liquidation, misfeasance, validation order, winding up petition,