---
title: "Demand on a guarantor under a personal guarantee (letter)"
url: "https://ailawframework.com/precedents/debt-recovery-and-civil-enforcement/guarantor-demand-letter"
type: "precedent"
site: "AI Law Framework"
id: "a46-guarantor-demand-letter"
area_id: "A46"
kind: "letter"
ai_level: "yellow"
version: 1
task_ids: ["A46-R20260922-1"]
law_stated_as_at: "2026-10-18"
---

# Demand on a guarantor under a personal guarantee (letter)

> Letter making formal demand on a guarantor after the principal debtor defaults: identifies the guarantee, the default and the amount, meets the guarantee's own demand conditions and stays inside the ACCC and ASIC debt…

Canonical page: https://ailawframework.com/precedents/debt-recovery-and-civil-enforcement/guarantor-demand-letter  
Law stated as at: 2026-10-18

Site index for agents: https://ailawframework.com/llms.txt

Letter making formal demand on a guarantor after the principal debtor defaults: identifies the guarantee, the default and the amount, meets the guarantee's own demand conditions and stays inside the ACCC and ASIC debt collection guideline.

## Key facts

- Kind: Letter. A letter or email you adapt and send.
- Practice area: [Debt Recovery & Civil Enforcement](https://ailawframework.com/precedents/debt-recovery-and-civil-enforcement.md)
- Jurisdictions: Australia
- AI level: Yellow. AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at: 2026-10-18
- Status: Maintained. Checked on 2026-10-18 against the 3 authorities it cites, for Australia.

## When to use it

Use when a trade or finance customer has defaulted and a director or other person has guaranteed the debt, and the guarantee requires (or it is prudent to make) a written demand before suing the guarantor. Read the guarantee first: its demand, notice and limitation clauses decide what this letter must say and how it is served.

## Used for these tasks

- [Draft a letter of demand from the contract and the ledger](https://ailawframework.com/practice/debt-recovery-and-civil-enforcement/draft-a-letter-of-demand-from-the-contract-and-the-ledger.md)

## How AI may be used

AI may fill the letter from the guarantee, the account and the default history; a lawyer checks the guarantee's demand conditions, the amount, any liability cap and the tone before it is sent.

**AI may:**

- Extract the parties, date, guaranteed obligations, demand clause, notice clause and any liability cap from the signed guarantee
- Populate the schedule of unpaid invoices from the ledger and total it, with a separate interest line
- Flag any guarantor who has said they are represented, have disputed liability or are in financial difficulty, so the letter is held

**AI must not:**

- Must not state an amount above any cap or outside the obligations the guarantee actually covers
- Must not threaten bankruptcy, legal proceedings, credit listing or contact with family or employers unless the client has instructed that step and it is lawfully available
- Must not send the letter, or any follow-up, direct to a guarantor who is known to be legally represented

**The lawyer checks:**

- The guarantee is signed, dated and covers this debt, and any precondition (demand on the principal, notice period, method and address for notices) has been met
- The amount demanded reconciles to the ledger and the guarantee: principal, interest rate source, costs only if the guarantee allows them, and any cap applied
- Whether the guaranteed contract is a regulated consumer credit contract, which brings in National Credit Code guarantor protections
- Whether the principal debtor is under external administration or bankrupt, and that the letter says nothing inconsistent with that process

## Authorities

- [ACCC and ASIC, Debt collection guideline for collectors and creditors (April 2021), part 2 ss 4, 5, 9, 11, 13 and 19 (hours and frequency of contact, represented debtors, information, disputes, consequences of non-payment)](https://www.accc.gov.au/system/files/Debt%20collection%20guideline%20for%20collectors%20and%20creditors%20-%20April%202021.pdf)
- [National Credit Code ss 36 and 83, information a credit provider must give a debtor or guarantor on request (as summarised in notes 40 and 42 of the ACCC and ASIC guideline)](https://www.accc.gov.au/system/files/Debt%20collection%20guideline%20for%20collectors%20and%20creditors%20-%20April%202021.pdf)
- [ACCC, Guideline on debt collection for collectors and creditors (publication page)](https://www.accc.gov.au/about-us/publications/guideline-on-debt-collection-for-collectors-and-creditors)

## Full text and drafting notes

The full text and the drafting notes are not part of this public page. Signed-in firm accounts can read them at https://ailawframework.com/precedents/debt-recovery-and-civil-enforcement/guarantor-demand-letter and through the signed-in MCP connector https://ailawframework.com/mcp/firm.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*