personal guarantee

  

Definition

Agreement that make one liable for one's own or a third party's debts or obligations. A personal guarantee signifies that the lender (obligee) can lay claim to the guarantor's assets in case of the borrower (obligor) default. It is equivalent of a signed blank check without a date. The obligee is generally not required to seek repayment first from the obligor's assets before going after guarantor's assets. The lender's actions are usually based on whose assets are easier to take control of and sell. Once signed, a personal guarantee can only be cancelled by the obligee.

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