Protection & Risks Of Personal Guarantees
Personal Guarantee Lawyers
Personal guarantees are when one person legally obligates themselves to pay the debts or obligations of another person or company. It is a personal promise to step into the place of another in a contract. It is essential to understand exactly what you are agreeing to and will be liable for before you sign anything. Personal guarantee lawyers make sure that the person giving the guarantee understands what they are doing. Learn more here about personal guarantees, in Calgary Alberta. 403-225-8810 for booking today.
Why Personal Guarantees Exist
Lending money brings risk. Most lenders prefer to minimize their risk when lending money to people and businesses. Further, many banks and companies do not want to lend money, rent buildings or enter agreements with a company or person that does not have significant assets. For example, if a person incorporates a company for tax savings, but the company holds no assets in the company’s name, then no protection exists for the lender in case the borrower defaults on payments. If the person who starts the company has assets, a home for instance, then even if the company protects the shareholder(s) from liability, a personal guarantee protects the company whom that money is owed to.
Why Appear In Front of Personal Guarantee Lawyers?
In Alberta, all personal guarantees must have a personal guarantee acknowledgement. These are signed in front of personal guarantee lawyers. It is Alberta law that establishes this requirement for the guarantee to be enforceable. This means that a personal guarantee in Alberta lacks an ability to enforce against if no acknowledgment is properly executed. In this case, the law requires signing with a lawyer. A commissioner for oaths, does not have the requisite authority.
What To Bring To Your Appointment
You need the personal guarantee, along with the actual loan, rent or other agreement that is being guaranteed. Personal guarantee lawyers MUST make sure that you understand exactly what obligations that you are taking on as the guarantor. Without the actual agreements, we cannot do that. For bank loans, the banks often forget to send the loan agreement with the guarantee. Without it, the appointment will have to be re-booked. Please ask your lender to provide all relevant materials to you so you are ready for your appointment.
Risks Of Signing These Agreements
Many risks come with signing a guarantee. You bind yourself personally to ensure payment of a debt that you otherwise, have no liability for. All agreements include differing provisions however many include terms with similar variations. For example, these include:
- The ability to seek payment from the guarantor before even approaching the debtor;
- Liability for costs associated with collection of the owed money;
- Requirement to pay any owed interest;
- Risk of personal liability for other loans or amounts owed to the same lender, even if not related to the current agreement; and lastly
- Risk of losing your home to pay for the amount owed.
Types Of Agreements Requiring Personal Guarantee Lawyers
Many types of agreements often include a persona guarantee. In each instance the requirement forms a basis to further protect the lender in case of a default. For example, the following include some of the agreements that require personal guarantees in Alberta:
- Small business loans;
- lines of credit;
- Account receivable loans;
- Mortgages to small companies;
- Purchase or sale of a business;
- Mortgages to individuals who do not qualify on their own;
- Rental agreements;
- Lease agreements; and lastly
- Contracts for the provision of inventory.
Finding Personal Guarantee Advice Lawyers In Calgary
We understand that time plays a key role in many loan situations. Our team is happy to help you when you need it. To schedule an appointment with one of our personal guarantee lawyers, please contact our experienced team at Kahane Law Office. Often, our office accommodates same or next day service, however, we schedule a time that works for you. Our location is not downtown. To make things even easier, our location is central in Calgary and we have lots of free parking. We will need to know the nature of the agreement as our lawyers specialize in different aspects of law. Also, please remember, we require the actual loan agreement or other agreement that you are entering into.
Please feel free to reach us toll-free at 1-877-225-8817 (or 403-225-8810 locally in Calgary, Alberta), or email us directly here.