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Stuart J
Stuart J, Solicitor
Category: Canada Law
Satisfied Customers: 22624
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
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I am looking more than a personal guarentee us$400,000 debt

Customer Question

I am looking for something more than a personal guarentee for a us$400,000 debt someone has promised to pay over 5 years. I recall some paper someone can sign in israel that has legal teeth in case of default. i thoughts its a "pishy" or perhaps a "shtar chov" which can be put into the execution office for collection in the event of breach of contract. as its over 5 years i am nervous. he has no asset he is willing to sign over just his offer of a prommosory note.
JA: Thanks. Can you give me any more details about your issue?
Customer: he's buying my business in UK and lives in israel. wants to pay over 5 years.
JA: OK got it. Last thing — Lawyers generally expect a deposit of about $36 to help with your type of question (you only pay if satisfied). Now I'm going to take you to a page to place a secure deposit with JustAnswer. Don't worry, this chat is saved. After that, we will finish helping you.
Submitted: 1 year ago.
Category: Canada Law
Customer: replied 1 year ago.
this is Israel law and UK law not really canada. only respond if you passed the bar in Israel
Expert:  Stuart J replied 1 year ago.

I heard what you said about passing the bar in Israel but as it’s a UK business, surely it would be UK law that is applicable in which case, I would be pleased to deal with this for you

Customer: replied 1 year ago.
More too it then that. He lives in israel and that is where his assets are. The company is not the guarantor. This is a personal promissory note. I understand there is a good version in israel. Not sure the name or if a foreigner can use it. You pick up the form at the post office there.
Expert:  Stuart J replied 1 year ago.

Okay, let me give you this from the UK law point of view and from a practical point of view. It may or may not answer your questions but at least then you are no worse off than you were.

In the UK, all the enforceability issues would be dealt with in the business sale agreement.

The promissory note and personal guarantee is all well and good and, provided they are properly drafted and executed, perfectly enforceable.

However, issues arise if the buyer simply does not pay all of the money or some of the money.

If you are in the UK, then there are practical difficulties in trying to enforce a UK agreement in respect of assets in Israel.

If the assets were in the UK, not only could you have a personal charge, you could have a charge over the assets and if this was land or property, you could have a charge over that which means that it could not be sold until you were paid off.

As the companies in the UK, what you could have is a charge over the company and the company assets.

You can word the agreement (this is where you really need a lawyer) such that you retain a huge interest in the company until such time as all the money has been paid in full and the timescale for paying in full even in default, is specified. In default, you could have it so that the company reverts to you and you keep the rest of the money dealing with it as deposit. You have to be very careful with the criteria and the wording but that is the general gist of it.

Because of the amount of money involved here and the potential for you losing $400,000, I would strongly suggest that any business agreement is properly drafted by solicitors either in the UK or Israel although, to be honest, the English judicial system has been the model for the rest of the world and you might want to therefore rely on English law. Certainly, I would as do many countries throughout the world.

A judgement made in the English court is perfectly enforceable in Israel as you would read here.

you can download an interesting article on personal guarantees in Israel from this page.

Customer: replied 1 year ago.
please look back at my original request. it had to do with a personal guarentee and an instrument in israel. I know what is available in UK. There is nothing in UK except the business to secure the debt. Is there someone different to hel with this. in the opening emails it indicated you understood my issue
Expert:  Stuart J replied 1 year ago.

Thank you. The extension of the term which would be essential now if there was going to be a mortgage on the property, could be done by either an extension or a new lease. Whether it would be under the same terms as the old release would be down to whether there is a clause in all the leases which says they must be in the same form and also whether both of the freeholders agree to the changes and of course whether the tenant of that property also agrees.

As far as I am aware, this is just a UK law site. I am not aware that there is any Israeli Lawyer on here.

I didn’t post the original reply, they come from admin.

I will opt out

Customer: replied 1 year ago.
probably best i get someone else to answer. your not answering my question. im looking for the name of the vehicle in israel to secure a prommissory note. i said it in my first request and the system said they understood my request. i have a uk attorney. i was looking for someone with israeli experience and i thought i got luck with the quck response from the sight.
thank you anyways