Will a personal guarantee put my house at risk?
A personal guarantee does not automatically put your home at risk, but it can lead there. A guarantee makes you personally liable for the business debt if the company cannot pay. If you then cannot pay the guaranteed amount, the lender can sue you, obtain a County Court Judgment, and apply for a charging order against a property you own. A charging order secures the debt against your home; only in more serious cases does a lender then seek an order for sale. The key distinction is whether the guarantee is unsupported (an unsecured promise to pay, which only becomes a charge on your home after court action) or whether it is backed from the outset by a legal charge over your property, in which case your home is security directly.
How a guarantee can reach your home
The usual sequence is: the company defaults, the lender demands payment under the guarantee, and if you cannot pay it pursues you personally. That can mean a County Court Judgment, then an application for a charging order over property you own under the Charging Orders Act 1979. A charging order does not force a sale on its own; the lender would have to apply separately for an order for sale, which the courts do not grant lightly, especially on a family home. So the risk is real but it is a process with several steps, not an automatic loss of your house.
Unsecured guarantee vs a charge over your home
An unsecured personal guarantee is a debt like any other until a court secures it. A guarantee supported by a legal charge over a named property is different: the lender already holds security over that home, so enforcement is more direct. Always check which one you are signing. If a lender asks for a legal charge over your house, that is a much bigger commitment than a standalone guarantee.
How to limit the risk
Negotiate a cap on the guarantee so your liability is a fixed amount, not the whole facility. Check whether your home is jointly owned, as a co-owner who did not sign has their own protected interest. Take independent legal advice before signing, which reputable lenders expect for larger guarantees. And keep the company well run, because the guarantee only ever bites if the business cannot pay.
Frequently asked questions
Can a lender take my house if I sign a personal guarantee?
Not automatically. An unsecured personal guarantee only reaches your home if the lender sues you, obtains a County Court Judgment and then applies for a charging order over property you own under the Charging Orders Act 1979. A charging order secures the debt against the home; the lender would have to apply separately for an order for sale, which the courts do not grant lightly, especially on a family home.
What is the difference between an unsecured personal guarantee and a charge over my home?
An unsecured personal guarantee is a promise to pay that only becomes a charge on your home after court action. A guarantee backed from the outset by a legal charge over a named property means the lender already holds security over that home, so enforcement is more direct. Always check which one you are signing.
How can I limit the risk to my home from a personal guarantee?
Negotiate a cap so your liability is a fixed amount rather than the whole facility, check whether your home is jointly owned because a co-owner who did not sign keeps their own protected interest, and take independent legal advice before signing, which reputable lenders expect for larger guarantees.
Does a charging order force the sale of my house?
No. A charging order on its own only secures the debt against the property. To force a sale the lender must apply separately for an order for sale, and courts are reluctant to grant one against a family home except in more serious cases.
This is general information, not legal advice. Personal guarantees and charging orders are governed by the terms you sign and by law including the Charging Orders Act 1979. Take independent legal advice on your own guarantee before signing or if a claim is made. Last reviewed June 2026.