The paperwork matters
A guarantee must be properly executed and clearly cover the debt to be enforceable.
Guarantees
Enforcing a personal guarantee on a business debt
When a company can't or won't pay, a signed personal guarantee can let you pursue the director or owner behind it. Here's how a guarantee works and how Merion recovers against one.
A personal guarantee is a promise by an individual — usually a director or owner — to pay a company's debt if the company does not. It is one of the most useful protections a supplier can hold, because it means an unpaid trade account is not limited to a company that may have little in the way of assets. Where a valid guarantee exists, the guarantor can be pursued in their personal capacity for the amount owed.
Enforcing one still depends on the paperwork. The guarantee needs to be properly executed, clearly worded and applicable to the debt in question, and the underlying account must be established on the evidence. Merion reviews the guarantee and the account together, makes a professional demand on the guarantor, and works the matter on a no-recovery-no-commission basis. This is general information, not legal advice — the enforceability of a specific guarantee should be confirmed with a qualified solicitor. You can refer the account for a free appraisal.
How it works
Recovering against a guarantor
Pursue the individual
A valid guarantee lets recovery extend to the director or owner personally.
Evidence-led demand
We assess the guarantee and the account together before making a professional demand.
No recovery, no fee
We work on commission — nothing to pay upfront.
Have a signed guarantee on file?
Refer the account and we'll assess the guarantee and pursue the debt professionally.
Common questions
Frequently asked questions
Can I chase a director personally for a company debt?
Only where you hold a valid personal guarantee (or another basis in law). A properly executed guarantee that covers the debt lets recovery extend to the guarantor personally.
What makes a personal guarantee enforceable?
Broadly, it must be properly signed, clearly worded, and apply to the debt in question, and the underlying debt must be provable. Enforceability of a specific guarantee should be confirmed with a solicitor.
What if I'm not sure the guarantee is valid?
Refer the account and we'll review the guarantee and the account together, and tell you honestly whether recovery against the guarantor looks viable.
Is this legal advice?
No — this is general information only. For advice on a specific guarantee, consult a qualified solicitor.
Get started
Holding a personal guarantee?
Refer the account for a free, obligation-free appraisal.