Personal Guarantees in Ireland: What Directors Need to Know

The personal guarantee is the small print that ate Irish directorship: signed on the way into the facility, forgotten through the good years, remembered by registered post when the company stumbles. The corporate veil you incorporated for has a director-shaped hole in it — and the demand letter is drafted to sound unanswerable. It rarely is.

What You Actually Signed

Guarantees are creatures of their documents, and the documents vary enormously: capped or unlimited; confined to one facility or catching “all sums”; guarantee alone or paired with security; conditional on notices and demands done correctly. The first task in every guarantee file — signing or defending — is the unglamorous one: read the instrument against the facts, because the gap between what the creditor demands and what the document supports is where most of these cases are won, lost or priced.

When the Demand Arrives

• Do not panic-pay or panic-promise: the first response sets the file, here as in every exposure matter;
• Construction first: scope, cap, conditions, execution — strictly read;
• The variation question: facilities restructured or varied without the guarantor’s consent raise real issues in the right circumstances;
• The figure audited: demands routinely sweep in sums outside the guarantee’s scope;
• Then the negotiation: from analysed strength — settlements and structured arrangements are the routine endgame, and they price according to the strength of what the reading found.

The Wider File

Guarantee demands rarely travel alone: they arrive alongside the liquidation, the restriction letter and sometimes the loan-account claim — one crisis, several envelopes, best answered as a single coordinated file rather than four panicked replies. And for the director reading this before signing rather than after demand: the checklist in the FAQs below is the cheapest advice on this page. The company-side version of the crisis — rescue while rescue exists — is at insolvency & SCARP.