Personal Guarantees (PGs) and Director Liability

Limited liability usually protects directors, but Personal Guarantees pierce that veil. If you signed a PG for a business loan, lease, or supplier account, you are personally liable if the company fails.

The Risk of Calling in PGs

Lenders will often pursue the company first, but if the company enters liquidation, they will aggressively pursue the guarantor. This puts your home and personal assets at risk.

Can you negotiate a PG?

Yes. It is often possible to negotiate a full and final settlement for less than the full amount, especially if the lender believes you have few assets. Do not ignore a demand for payment under a guarantee.