The Debtor’s Personal Guarantee & Confirmation of a NJ , but there are some common ones that you may come across. This article will explore the differences between these two types of NJs and explain when they are used. In most cases, personal guarantees do not apply to debts that have been discharged in bankruptcy.
What is the difference between The Debtor’s Personal Guarantee and a NJ?
A personal guarantee is a contractual relationship between the creditor and the guarantor. This type of agreement has two basic purposes. First, it allows creditors to enforce a debt against the guarantor without recourse to any other obligation-holders. Second, it allows a creditor to collect the full amount of a guaranteed debt, regardless of whether there are other individuals or collateral used to secure repayment.
A personal guarantee protects the bank in the event of loan default. The guarantee is notarized and binds the signatories until the loan is paid in full. In addition, it protects the creditor if the borrower fails to make the loan. The signatories must pay attention to the terms and conditions of the personal guarantee to avoid any pitfalls.