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How will the creditor enforce the guarantee?
The creditor who holds the guarantee will firstly write to the guarantor for the debt to be paid.
If the debt is not paid, the creditor may commence enforcement proceedings and this usually involves the following steps;
- Apply to court for a judgement
- Apply for a bankruptcy notice
- Apply for a bankruptcy petition
- Apply to court that the guarantor be made bankrupt.
The legal process to enforce a personal guarantee may take many months and be stressful for the guarantor. Where the debt remains unpaid and the creditor presses through to the bankruptcy hearing, this will result in the guarantor becoming bankrupt.
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