What to keep in mind
Define secured obligations, guarantor capacity, collateral, ranking, registration, enforcement conditions and releases.
Nominal security can prove ineffective if it is poorly documented or subordinated.
Distinctions often confused
A promise to pay is different from an enforceable personal or proprietary security interest.
Frequently asked questions
Can new collateral be granted during debt renegotiation?
Potentially, subject to insolvency risks, priority and statutory requirements.
Should the guarantee cover interest and enforcement costs?
Its exact scope should be stated clearly and lawfully.
Informational content. It is not a substitute for professional advice.