Is a Personal Guaranty the Answer?
All too often we encounter credit/collection managers insisting an account is collectable because they have a personal guaranty signed by the principal of a defunct corporation. What they fail to realize is the guaranty has no value if the person(s) signing the guaranty has no attachable assets. We can sue the individual, obtain a judgment, file a lien, etc., but if we cannot locate attachable assets, the guaranty is virtually worthless. 
If your firm uses personal guarantees, or is considering using them, we suggest the following:
1. Use a form that clearly states the terms and conditions and requires a signature right below the guaranty.
2. If the guarantor is married, have the spouse sign the guaranty. Their assets are probably jointly held, so without both signatures, you cannot attach their assets.
3. Use a good credit application to identify current bank accounts, etc. Garnishing a bank account is the most efficient means to executing on a judgment. Your guaranty has more value if you know how to execute on their assets.
4. If they miss a payment, or something leads you to believe their circumstances have changed, demand that they complete an updated credit application. If they are not willing to do so, or they take too long to complete the form, place the account with a certified commercial collection agency for immediate action.
Remember a personal guaranty is only as good as the assets of the person(s) signing it. If your customer refuses to sign the guaranty, have his/her spouse sign it, or does not properly complete a credit application, make them pay cash in advance.