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Question Details: I loaned a person a reasonably large sum of money several years ago. I did not ask for a personal guarantee at the time, but changed my mind and requested one six months later. He signed the guarantee, but his signature was not witnessed. He is paying the loan back incredibly slowly. Is his personal guarantee enforceable even if it wasn't witnessed? If so, how would I go about enforcing it?
Filed under Property Law | 1393 View(s)
Community Law Wellington & Hutt Valley
A personal guarantee does not necessarily need to be witnessed to be enforceable. If you loaned the money to this person, they will generally be personally liable for the debt under the loan agreement even without having signed a guarantee.
The enforceability of both the loan and the guarantee will depend on what the words in the agreements and the facts of the situation.
A debt must be due under the terms of the loan before enforcement action can be taken.
Assuming a debt is due, one enforcement option is to get a judgment against the debtor for the amount of the debt. A judgment against a debtor is enforceable by the court. A judgment can be obtained from either the Disputes Tribunal, District Court or High Court depending the amount of the debt and whether the debt is disputed. Court proceedings can be costly, so you should first consider whether the debtor has any assets that can be used to pay a judgment in your favour.
Another option is to contact a debt collection agency to recover your debt. They will charge you for their service.
Information about the Disputes Tribunal can be found on the following website: www.justice.govt.nz
The Community Law Manual has useful information on Debt Recovery www.communitylaw.org.nz and on the Disputes Tribunal www.communitylaw.org.nz.
If the sum is large, you should consider getting legal advice before taking action.
Answered 11 Sep 2013. The IMPORTANT NOTICE below is part of this answer.
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