Reconsidering a personal guarantee as a credit enhancement: your guarantor may be shielding assets with an asset protection trust as a result of the Sarbanes-Oxley Act.(Credit Column) From: Business Credit | Date: February 1, 2004| Author: Blakeley, Scott | COPYRIGHT 2004 National Association of Credit Management. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group.Copyright information

For credit professionals, personal guarantees furnished by a company's officer can increase the prospect for payment. A personal guarantee provides the vendor with a second pocket to look to, in the event the corporate customer fails to pay. A credit executive must take certain steps to ensure he or she has a valid guaranty to avoid unnecessary legal attacks by the guarantor.

For example, the language in the guarantee should clearly state that the particular individual s...