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Current account guarantees and insolvency proceedings: impact and specific features
By Raphaël MORENON20 July 2025A guarantee for a company's current account is a common guarantee, often seen as a mere formality by the directors or close relations who sign it. However, when the company encounters financial difficulties and is the subject of collective proceedings, the guarantor's situation suddenly becomes precarious. Far from being a simple moral commitment, this act has rigorous legal effects that are often overlooked. The aim of this article is to detail the specific impact of insolvency proceedings on current account guarantees, a technical mechanism at the heart of many complex situations. For an overview, you can consult the complete guide to current account guarantees, which sets out the basics of this type of undertaking. In this section, we will look at the complex interplay between security law and the general rules governing suretyship in insolvency proceedings. Introduction: the impact of insolvency proceedings on current account guarantees...
Current account guarantees: a complete guide and legal issues
Bonding, Guarantees, Securities and Enforcement LawGuarantees for partners' current accounts or bank overdrafts are one of the most complex personal sureties in commercial law. It is at the crossroads of several legal approaches: that of guarantees, that of current accounts and, frequently, that of insolvency proceedings. For company directors and managers, the...The reform of surety bonds: a new balance between protection and efficiency
Bonding, Guarantees, Securities and Enforcement LawGuarantees are the most widely used personal surety in banking and commercial practice. Its effectiveness is based on its apparent simplicity: one person undertakes to pay the debt of another in the event of default. Order no. 2021-1192 of 15 September 2021 completely rewrites the law on surety bonds. This reform...Bonds and independent guarantees: what are the differences for your company?
Bonding, Guarantees, Securities and Enforcement LawBusiness relationships expose your company to the risk of non-payment. A customer in difficulty, a partner in default, an insolvent subcontractor - these situations threaten your cash flow. Personal guarantees are effective tools for securing your transactions. They oblige a third party to honour your debtor's commitments by...Reform of surety bonds: what's new for companies and their directors?
Bonding, Guarantees, Securities and Enforcement LawA surety bond is the most widely used personal guarantee in business life. When a person stands surety for a company, they undertake to repay the creditor if the principal debtor defaults. This practice, which is particularly common for company directors guaranteeing their company's debts, used to be...Insolvency proceedings and suretyship: protection or trap for the guarantor?
Bonding, Guarantees, Securities and Enforcement LawSigning a guarantee is like walking a tightrope. If the debtor falls, so can the guarantor. But there are mechanisms in place to cushion the fall. In a tense economic climate, with business failures on the increase, the fate of guarantors is a matter of concern. I. The fundamentals of surety in the face of...The protection of guarantors under French law: what are the differences between the different categories?
Bonding, Guarantees, Securities and Enforcement LawSurety bonds are still one of the most widely used forms of security in our economy. This guarantee, under which one person undertakes to pay the debt of another in the event of default, offers various forms of protection depending on the guarantor's profile. Let's take a look at these protective mechanisms, which have proliferated over the...The guarantor's legal shield: 4 essential safeguards
Bonding, Guarantees, Securities and Enforcement LawActing as guarantor for a close friend or business partner involves significant risks. The law has gradually strengthened the protection afforded to people who agree to guarantee the debts of others. The Order of 15 September 2021 modernised these mechanisms by bringing them together in the Civil Code. Here are the four shields...Termination of a guarantee: methods and consequences
Bonding, Guarantees, Securities and Enforcement LawSurety bonds, a cornerstone of surety law, always expire eventually. This personal guarantee can disappear in two distinct ways: as an accessory or as a principal guarantee. Understanding these mechanisms is essential for creditors and guarantors alike. Our lawyers can provide you with legal expertise in this area...Recent reforms to surety bonds: changes for creditors and sureties
Bonding, Guarantees, Securities and Enforcement LawThe bail bond underwent a major transformation with Ordinance no. 2021-1192 of 15 September 2021. This reform, which came into force on 1 January 2022, meets a need to clarify a law that had become complex and sometimes inconsistent. It makes far-reaching changes to this personal surety, which allows a creditor...Understanding the effects of surety bonds: a practical guide
Bonding, Guarantees, Securities and Enforcement LawWhen you become a guarantor, you undertake to pay the debt of a third party in the event of default. This creates a complex legal relationship between the guarantor, the creditor and the principal debtor. It gives rise to a network of obligations and rights. An understanding of these mechanisms is vital for anyone thinking of...Guarantees: what are the conditions for a valid commitment?
Bonding, Guarantees, Securities and Enforcement LawGuarantees are a daunting commitment for anyone who enters into one. Yet this legal mechanism, which allows a third party to guarantee the debt of a principal debtor, is still poorly understood by many signatories. Consent: the cornerstone of guarantees Guarantees require free and informed consent. The...The different forms of guarantee
Bonding, Guarantees, Securities and Enforcement LawSuretyship is one of the most widely used personal sureties under French law. It enables a creditor to secure its claim by obtaining a commitment from a third party to pay the debt if the principal debtor fails to do so. This form of security comes in several varieties, each with its own specific features...Characteristics of surety bonds
Bonding, Guarantees, Securities and Enforcement LawSurety plays a major role in our economy. This personal surety enables a creditor to obtain a commitment from a third party to guarantee the debt of a defaulting debtor. The mechanism may seem simple, but its features deserve attention. This article provides a detailed understanding of the mechanisms and pitfalls of surety bonds...Bonding: understanding its mechanisms and pitfalls
Bonding, Guarantees, Securities and Enforcement LawA surety bond is a contract in which one person undertakes to pay the debt of another in the event of default. Simple on the face of it, this mechanism conceals a number of risks. The Order of 15 September 2021 overhauled this law, which had previously been scattered across a number of different codes. The basics of surety bonds Surety bonds are defined...Joint surety for a business loan
Bonding, Guarantees, Securities and Enforcement LawJoint and several guarantors of a business loan may be committing their personal assets. They must therefore be vigilant.Simple or joint surety
Bonding, Guarantees, Securities and Enforcement LawA simple or joint surety is a person who undertakes to pay the debts of another in the event of non-payment. This commitment is generally made in support of a bank loan. Definition of a guarantor Article 2288 of the French Civil Code defines a guarantor as a natural or legal person...Guarantees and mergers
Bonding, Guarantees, Securities and Enforcement LawThe guarantor's commitment may be affected by the merger of the creditor company. The extent of the guarantor's commitment When applying for a bank loan, the bank may request additional guarantees from its future co-contractor. One of these guarantees is formalised in a guarantee deed. This is a...
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