When it comes to personal guarantees in California, it’s better to be safe than sorry. Always be sure to consult with a legal professional before signing any documents in order to have full control over your situation.
At Lehr Law, we strive to provide legal services that are focused on each client’s individual success. You can always be sure that you are receiving authentic representation from our team of legal professionals.
Why A Guarantee Is Important In Agreements
A guarantee is a promise to answer for the debt or default of another person or entity. The guarantor, or party making the guarantee, becomes liable for the debt if the other party fails to pay.
In California, personal guarantees are common in business transactions. They are often used when making a loan or extending credit. A personal guarantee can help protect the lender by ensuring that the borrower will be held responsible for the debt if it is not repaid.
A personal guarantee typically covers the following:
- The principal amount of the debt
- Interest on the debt
- Late fees and other charges incurred as a result of the default
- Costs and expenses associated with collecting the debt, including attorneys’ fees and court costs
- Any other damages suffered by the lender as a result of the default
A personal guarantee consultation is highly recommended and can provide the following benefits:
Professional Advice Can Help You Avoid Costly Mistakes
An experienced attorney can help you understand the consequences of a personal guarantee, including how it will impact your credit score and future borrowing ability. They can also review the terms of the personal guarantee and make sure that they are reasonable and favorable to you.
Better Understand Your Rights and Obligations
In a consultation, attorneys can help you better understand your rights and obligations, and answer any questions you may have about the process. A legal professional can also provide you with advice on how to best protect yourself in the event of a default. They can help you develop a strategy that will minimize your risks and protect your interests. This can be invaluable, especially if you’re not familiar with personal guarantee agreements.
Protect Your Assets
There are a number of things an attorney can do to help you minimize the risk of losing personal assets in a guarantee. For instance, attorneys may be able to negotiate better terms for you or help you find a way to release yourself from the guarantee if things go wrong. They can also help you structure your business and contracts in such a way that your risk is minimized.
Get The Help You Need With A Personal Guarantee Consultation
Considering providing a personal guarantee, it’s important to consult with an attorney first. This will help ensure that you understand the risks and benefits involved and that you make the best decision for your situation. Don’t settle for a misguided interpretation of these important agreements, as entering into a contract you don’t fully understand can result in your personal assets being liable for seizure.