Legal issues
Key issues include enforceability, scope, amount guaranteed, whether the underlying debt is due, compliance with demand or notice provisions, variation of the underlying facility, security, limitation and any defence available to the guarantor.
Company debt and personal liability are distinct. A director is not automatically liable merely because the company owes money.
Evidence that matters
Send the signed guarantee, underlying contract or facility, variations, statements, demands, notices, security documents, payment history and correspondence with the company and guarantor.
Reasonable lines of enquiry
Verify the executed guarantee and every document incorporated into it. Check the contractual trigger, any liability cap, continuing-guarantee wording, joint-and-several provisions, demand or notice requirements, later variations and whether the creditor has already recovered money from the company, another guarantor or security.
Before proceedings, consider the guarantor's apparent asset position and whether enforcement against the individual is commercially realistic.
What happens next
After reviewing the guarantee and underlying debt, the creditor may send a compliant demand to the guarantor and, if unpaid, issue civil proceedings. A judgment can then be enforced against personal assets using the appropriate method.
Immediate steps
Locate the complete guarantee and every later variation. Do not assume the guarantee covers all later borrowing or contractual changes without checking the wording.
What should you send us?
Send the guarantee, underlying agreement, statements, demands, variations, security documents and all relevant correspondence.