What to Consider When Seeking a Mortgage from a Debtor

What to Consider When Seeking a Mortgage from a Debtor

Estimated reading time: 10 minutes

When you lend money, or offer goods or services on credit, how do you protect your interest in the case of non-payment of the debt? In this article, we consider how you might secure this debt with an interest in land. Key mechanisms for doing this are via a ‘charging clause’ in a director’s personal guarantee, and/or via registration of a mortgage.

What is a personal guarantee?

What is a personal guarantee?

Estimated reading time: 11 minutes

A personal guarantee is a promise by a person to be answerable for a debt or obligation of another person/entity in the event that person/entity defaults. Seeking personal guarantees from directors is a common way for SMEs to limit their risk in commercial credit arrangements with other SMEs.