Improperly Executed Documents are Creditors Biggest Impediment

Improperly Executed Documents are the Biggest Impediment to Holding Someone Responsible for a Debt.

Occasionally commercial companies will place a debt with me to sue a company debtor and its individual guarantor where the personal guarantee is not properly executed.

The most common way that a personal guarantee is not properly executed (other than no signature), is when the personal guarantor puts a corporate title next to their name. For example, personal guarantors will sign a personal guarantee on the line for the signature for the individual as, for example, “Tommy Signature, President.” While the document that Tommy Signature signed might say that it is a personal guarantee all over the document and in fact make clear that it is a personal guarantee, in the vast experience of Cellai Law Offices, P.C. in the Court system, Judges typically view the inclusion of the word “President” to mean that the person did not intend to personally guarantee the debt.

While one can debate the issue and argue it in Court (and it is always worth arguing because there are some cases that support your position), most Judges look at the inclusion of a corporate title as an intent on the part of the personal guarantor not to be a personal guarantee.

Companies having their account debtors execute a personal guarantee should be very diligent about having an account debtor sign the personal guarantee in their individual capacity without a title.

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