Personal guarantees and your home: CVL vs administration vs CVA
None of the three procedures releases a director's personal guarantee by itself. In a CVL or an administration the lender can still make its demand on you, because the administration moratorium protects the company, not guarantors, and a CVA only changes what you owe if its terms and your guarantee say so. What differs is the scrutiny: a liquidator or administrator can reverse a repayment of the guaranteed debt as a preference, and a CVA supervisor cannot. Your home is at risk only through a charge you gave over it, a judgment and charging order, or bankruptcy. Insolvency Act 1986; Charging Orders Act 1979
Data as of: legislation as published on legislation.gov.uk, the gov.uk bankruptcy and Recovery Loan Scheme guidance, and the British Business Bank Growth Guarantee Scheme page, all checked 24 September 2026 · England and Wales only.
The matrix: what each procedure means for your guarantee
Read across a row to compare the three procedures on one question. Each answer links to the provision it comes from. Where the answer depends on the wording of your guarantee or a CVA proposal, it says so.
| Question | Creditors' voluntary liquidation (CVL) | Administration | Company voluntary arrangement (CVA) |
|---|---|---|---|
| Does the procedure release your guarantee? | No. Nothing in the Insolvency Act 1986 releases a director's guarantee when the company is wound up. The guarantee is your own contract with the lender | No. The administration moratorium stops security being enforced over the company's property, and legal process against the company or its property, without the administrator's consent or the court's permission. It does not mention guarantors (Sch B1 para 43(2), (6)) | Not automatically. An approved CVA binds every creditor entitled to vote on it (IA 1986 s5(2)), but that concerns the company's debt. Whether it also cuts what you owe under the guarantee depends on the wording of the CVA proposal and of the guarantee, so have both read before the creditors decide |
| Can the lender pursue you while the procedure runs? | Yes, once the guarantee has been triggered under its own terms, for example by a written demand | Yes. The moratorium protects the company, not you (Sch B1 para 43) | Depends on the CVA and guarantee wording, as above. Nothing in the Act stops it |
| What reduces the amount the lender comes to you for? | Whatever the lender recovers from its security over company assets and any dividend the liquidator pays it | Whatever the administrator realises for the lender, including from any sale of the business, and any distribution | Payments the company makes to the lender under the CVA, while the CVA lasts |
| Can repaying the guaranteed debt before the procedure be reversed? | Yes. A payment that improves a guarantor's position is a preference (IA 1986 s239(4)(a)). You are connected with the company as a director (IA 1986 s249), so the liquidator does not have to prove the company wanted to prefer you; it is presumed unless the contrary is shown (IA 1986 s239(6)). The look-back is 2 years, and the company must have been unable to pay its debts at the time or become so because of the payment (IA 1986 s240(1)(a), (2)) | Yes, on the same rules. The administrator is an office-holder who can apply (IA 1986 s238(1)) | No. A CVA supervisor is not an office-holder under s238. The claim becomes available if the company later goes into liquidation or administration |
| Can you be ordered to contribute personally for wrongful trading? | Yes, on the liquidator's application (IA 1986 s214) | Yes, on the administrator's application, since 1 October 2015 (IA 1986 s246ZB) | No equivalent power while the company is in a CVA |
| Is a report made on your conduct as a director? | Yes. The liquidator must prepare a conduct report on each director (CDDA 1986 s7A) | Yes. The administrator must prepare one (CDDA 1986 s7A) | No. A CVA supervisor is not on the list of office-holders who must report (CDDA 1986 s7A(9)) |
| If you pay the lender, what can you recover? | You can take over the lender's judgments and securities and use its remedies against the company, and claim a fair share from any co-guarantor (Mercantile Law Amendment Act 1856 s5). A claim against a company in liquidation is worth whatever the liquidation pays that class of creditor | The same rights (Mercantile Law Amendment Act 1856 s5). A claim against the company is worth whatever the administration pays that class of creditor | The same rights (Mercantile Law Amendment Act 1856 s5), but check the CVA terms on how a guarantor's claim is treated |
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The practical reading: switching procedure does not make a guarantee go away. It changes how much the lender is short when it comes to you, when that happens, and how closely your own conduct is examined. If you are still choosing a route, the CVL, administration or strike-off comparison covers the wider trade-offs, and CVA vs administration sets out the rescue options side by side.
How a guarantee creditor can reach your home
There are four routes. None of them is stopped by the company's own insolvency procedure, because each is aimed at you or your property, not the company.
| Route to your home | What the creditor needs first | Does the company's procedure stop it? | Limits and protections | Source |
|---|---|---|---|---|
| Your guarantee is secured by a charge over your home | A signed charge over the property and the secured money falling due under its terms | No. The administration moratorium covers security over the company's property; your home is yours. Nothing in a liquidation or CVA protects it either | The lender enforces as mortgagee under the charge. Check exactly what the charge secures and whether it is capped | LPA 1925 s101(1)(i); Sch B1 para 43(2) |
| Unsecured guarantee: judgment, then a charging order | A court judgment against you on the guarantee | No. The claim is against you, not the company | The court weighs all the circumstances, including your personal circumstances and whether other creditors would be unduly prejudiced. A charging order works like an equitable charge. On a jointly owned home it attaches to your beneficial share, and an application for sale is decided on factors including the welfare of any child living there | Charging Orders Act 1979 s1(1), (5); Charging Orders Act 1979 s2(1); Charging Orders Act 1979 s3(4); TOLATA 1996 s14; TOLATA 1996 s15(1) |
| Bankruptcy petition on the guarantee debt | An unsecured debt of at least £5,000 and either an unpaid statutory demand served at least 3 weeks earlier, or enforcement of a court judgment for the debt that has come back unsatisfied | No. The petition is against you | Your interest in the home passes to a trustee. If your equity is below £1,000 the court must dismiss the trustee's application for sale, possession or a charge. If the trustee has not dealt with the home within 3 years it usually comes back to you. Once a year has passed since your estate first vested in the trustee, the court assumes creditors' interests outweigh everything else unless the circumstances are exceptional | IA 1986 s267(4); IA 1986 s268(1); IA 1986 s313; IA 1986 s313A(2) and SI 2004/547; IA 1986 s283A; IA 1986 s335A(3) |
| Growth Guarantee Scheme or Recovery Loan Scheme facility | A personal guarantee can be taken at the lender's discretion | No, for the guarantee itself | Your principal private residence cannot be taken as security under either scheme. Our reading: that rules out a charge given as scheme security, not a later court charging order on an unpaid judgment | British Business Bank, GGS; gov.uk, RLS |
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The gov.uk guidance on your home in bankruptcy adds that a sale can be delayed for up to a year if you need to arrange somewhere for children or a partner to live. A Bounce Back Loan is different again: it carried no personal guarantee, so see our Bounce Back Loan page for when directors can still be pursued.
Time limits worth knowing
| Time limit | Rule | Source |
|---|---|---|
| Suing on a guarantee signed as a simple contract | 6 years from when the cause of action accrued | Limitation Act 1980 s5 |
| Suing on a guarantee signed as a deed | 12 years from when the cause of action accrued | Limitation Act 1980 s8 |
| When the cause of action accrues | Depends on the guarantee's wording, for example whether a written demand is needed first. Have the document read | The guarantee itself |
| Statutory demand to bankruptcy petition | At least 3 weeks after service, if the demand is unpaid and not set aside | IA 1986 s268(1)(a) |
| Bankrupt's home returning to them | 3 years from the date of the bankruptcy, unless the trustee has acted | IA 1986 s283A |
| Trustee's application for sale of the home | From 1 year after the estate first vests in the trustee, creditors' interests are assumed to outweigh everything else unless the circumstances are exceptional | IA 1986 s335A(3) |
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What to do with this
Start by finding every guarantee you have signed and whether any of them is secured on your home; the personal guarantee exposure checker adds them up. Do not repay a guaranteed loan ahead of other creditors to protect yourself: the matrix shows why a liquidator or administrator can reverse it, and is repaying a loan before liquidation a preference goes through the test in more detail. If a guarantee is called, the settlement model compares an offer with what the lender would net by making you bankrupt. For what happens to you more widely, see will liquidating my company affect my mortgage and personal guarantees if your company fails.
Personal guarantees and insolvency: common questions
Does administration protect my personal guarantee?
No. The administration moratorium in Schedule B1 paragraph 43 protects the company and its property. It does not stop a lender making a demand on you under your guarantee, or enforcing a charge you gave over your own home.
Is a CVA better than liquidation for my personal guarantee?
It may delay a demand while the company keeps paying the lender under the CVA, and a CVA supervisor has no power to reverse preferences or bring wrongful trading claims. But a CVA does not release your guarantee unless its terms and your guarantee say so, and if it fails and the company goes into liquidation or administration those claims become available again.
Can the lender take my house if my guarantee was unsecured?
Not directly. It must first sue you and get a judgment, then apply for a charging order, and the court must consider your personal circumstances before making one. Separately, a creditor owed at least £5,000 can petition for your bankruptcy, and a trustee can then deal with your share of the home if your equity is £1,000 or more.
Can I pay off the guaranteed loan before liquidation to protect myself?
That is exactly the kind of payment a liquidator or administrator can challenge as a preference, because it improves a guarantor's position. As a director you are connected with the company, so the company is presumed to have wanted to prefer you, and the look-back period is 2 years. Take advice before moving any money.
Choosing between liquidation, administration and a CVA will not make a personal guarantee disappear, so plan for it as part of the decision rather than after it. Find every guarantee you have signed, check whether any is secured on your home, and do not repay a guaranteed loan ahead of other creditors: a liquidator or administrator can reverse that payment.
- Personal guarantee exposure checker
- Personal guarantee settlement model
- Personal guarantees if your company fails
General information, not advice about your company.
Methodology and source
Every rule on this page was read from the current text of the legislation on legislation.gov.uk on 24 September 2026: the Insolvency Act 1986, the Company Directors Disqualification Act 1986, the Charging Orders Act 1979, the Trusts of Land and Appointment of Trustees Act 1996, the Law of Property Act 1925, the Limitation Act 1980 and the Mercantile Law Amendment Act 1856. The £1,000 low value home figure is set by SI 2004/547 and confirmed as current by the gov.uk bankruptcy guidance. The scheme security rules are quoted from gov.uk (Recovery Loan Scheme) and the British Business Bank (Growth Guarantee Scheme). The matrix is our own arrangement of those provisions by procedure. Court decisions on how guarantees and CVAs interact are not summarised here, because we have not checked them against their published source; that is why several answers say the outcome depends on the documents. The page covers England and Wales only. It is general information, not legal or insolvency advice: a guarantee's exact wording decides much of what happens, so have it read by an adviser.
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