Notice to Guarantor (Australia)
Date: [Notice Date]
FROM (Creditor):
[Creditor Name], [Creditor ABN/ACN]
[Creditor Address], [Creditor City], [Creditor State] [Creditor Postcode]
TO (Guarantor):
[Guarantor Name]
[Guarantor Address], [Guarantor City], [Guarantor State] [Guarantor Postcode]
1. PURPOSE OF THIS NOTICE
1.1 This Notice is issued to you, [Guarantor Name], in your capacity as Guarantor under the following guarantee instrument:
[Guarantee Description] (the “Guarantee”).
1.2 The Principal Debtor under the Guarantee is: [Debtor Name] (the “Principal Debtor”).
1.3 The current amount owing by the Principal Debtor (and therefore the maximum amount for which you may be liable as Guarantor) is: AUD $[Amount Owing].
1.4 This Notice is issued for the following purpose: [Notice Purpose].
1.5 You are required to respond or make payment by: [Deadline Date].
2. NOTICE OF DEFAULT AND DEMAND
2.1 The Principal Debtor has failed to meet its obligations under the underlying credit or finance arrangement secured by the Guarantee. Accordingly, the Creditor is entitled to make demand upon you as Guarantor for payment of all or part of the Guaranteed Amount.
2.2 You are hereby notified that, unless the Principal Debtor remedies the default or you pay the outstanding amount specified in clause 1.3 above by [Deadline Date], the Creditor intends to take steps to enforce its rights under the Guarantee, which may include commencing legal proceedings against you personally.
2.3 Payment should be made to the Creditor’s nominated account as notified in writing, or by such other method as agreed with the Creditor.
3. YOUR RIGHTS AS GUARANTOR
3.1 As Guarantor, you have the following general rights at law and under the terms of the Guarantee:
- The right to request copies of all documents relating to the Guarantee and the underlying credit arrangement from the Creditor;
- The right to pay the outstanding amount and be subrogated to the Creditor’s rights against the Principal Debtor to recover the amounts you have paid;
- The right to claim contribution from any co-guarantors if you pay more than your proportionate share of the guaranteed debt;
- The right to seek to set aside the Guarantee if it was obtained by misrepresentation, undue influence, or unconscionable conduct; and
- The right to dispute the amount claimed as owing if you believe it is incorrect.
3.2 This Notice does not limit or exclude any right or remedy available to you under the Guarantee, the PPSA, the National Credit Code, the Australian Consumer Law, or at general law.
4. HOW TO RESPOND TO THIS NOTICE
4.1 If you wish to make payment, dispute this Notice, seek further information, or discuss your options, please contact the Creditor’s authorised representative at the address shown above.
4.2 All communications in response to this Notice should be directed to: [Creditor Name], [Creditor Address], [Creditor City], [Creditor State] [Creditor Postcode], Australia.
4.3 Governing Law. This Notice is governed by the laws of [Governing State], Australia.
Issued by the Creditor:
[Creditor Name]
[Creditor ABN/ACN]
Date: [Notice Date]
Authorised Representative of Creditor
________________
Signature
Date: ________________
What Is a Notice to Guarantor (Australia)?
A Notice to Guarantor in Australia puts a request, notification, or position in formal written form for the recipient, consistent with the National Consumer Credit Protection Act 2009 (Cth).
A Notice to Guarantor serves multiple functions. It formally puts the guarantor on notice of the principal debtor's default and the creditor's intention to enforce the guarantee. It discloses the current amount owing and the deadline for payment or response. Where required by statute, it gives the guarantor the minimum notice period to exercise rights of redemption, hardship variation, or objection before enforcement action is taken. It informs the guarantor of their statutory rights under the applicable legislation and recommends that the guarantor seek independent legal advice.
Under the National Credit Code, before a credit provider can commence enforcement action against a guarantor, the credit provider must generally first give a default notice to the principal debtor under section 88 of the Credit Code and allow the prescribed period (at least 30 days) for the debtor to remedy the default. The guarantor also has the right to request information about the credit contract and statement of account under sections 185 and 186 of the Credit Code, and the right to apply for a hardship variation under section 72 of the Credit Code if the guarantor is experiencing financial difficulty.
Under the PPSA, where enforcement involves the disposal of secured collateral, the secured party (creditor) must generally give the grantor (and, where applicable, the guarantor) at least 10 Business Days' notice of the proposed disposal method before proceeding, to allow the guarantor an opportunity to redeem the collateral under section 142 of the PPSA.
The legal framework governing the Notice to Guarantor (Australia) in Australia draws on several key statutes and regulatory bodies. Under the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 1989, ASIC regulates financial products and services. The National Consumer Credit Protection Act 2009 (Cth) governs consumer lending. The Australian Taxation Office (ATO) applies stamp duty through state revenue offices. The Australian Financial Complaints Authority (AFCA) resolves consumer financial disputes. The Reserve Bank of Australia (RBA) sets monetary policy affecting interest rate obligations in financial agreements. Parties executing a Notice to Guarantor (Australia) in Australia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The National Consumer Credit Protection Act 2009 (Cth) sets the foundational requirements.
When Do You Need a Notice to Guarantor (Australia)?
An Australian Notice to Guarantor is needed in the following circumstances.
Default by the principal debtor. When the principal debtor fails to meet their payment obligations under the underlying credit or finance arrangement, the creditor may wish to formally notify the guarantor of the default and demand payment under the guarantee. A written Notice is important to create a clear record of when the guarantor was first notified and what information was provided.
Pre-enforcement notice under the PPSA. Before enforcing a PPSA security interest by disposing of collateral (such as repossessing and selling goods that are the subject of a registered security interest), the secured party must give notice of the proposed enforcement action to the grantor and, where applicable, to the guarantor. The Notice to Guarantor provides this statutory notice and sets out the guarantor's rights under Chapter 4 of the PPSA.
Pre-enforcement notice under the National Credit Code. Where the guarantee is regulated under the National Credit Code, the credit provider must serve a default notice on the debtor before commencing enforcement. A separate Notice to Guarantor confirms the guarantor is also formally informed of the default and their rights.
Variation or extension of the underlying credit arrangement. Where a creditor and the principal debtor propose to vary the terms of the underlying credit arrangement (for example, by increasing the credit limit, extending the repayment period, or changing the interest rate), the creditor should notify the guarantor of the proposed variation so that the guarantor can decide whether to consent to remaining liable under the extended or varied arrangement, or to withdraw from the guarantee.
Informing the guarantor of their rights. Even where no immediate enforcement action is being taken, a creditor may issue a Notice to Guarantor as a matter of good practice to inform the guarantor of the current status of the debt, the guarantor's rights and obligations, and the availability of independent legal advice and financial counselling services.
What to Include in Your Notice to Guarantor (Australia)
A well-drafted Australian Notice to Guarantor should contain the following key provisions.
Identification of parties. The Notice must clearly identify the creditor issuing the Notice (with ABN or ACN) and the guarantor to whom it is addressed, with full legal names and addresses.
Description of the guarantee and underlying obligation. The Notice must describe the guarantee instrument (including its date and the parties) and the underlying credit or finance arrangement being guaranteed, together with the current amount owing.
Purpose of the Notice. The Notice must state clearly whether it is a demand for payment, a notice of default, a notice of variation of the underlying arrangement, a PPSA enforcement notice, or a general information notice regarding the guarantor's rights.
Deadline for response or payment. The Notice should specify the date by which the guarantor must respond, make payment, or exercise any right (such as the right to redeem collateral under section 142 of the PPSA).
PPSA enforcement provisions. Where enforcement involves a registered PPSA security interest, the Notice must describe the secured collateral, the proposed enforcement action, and the guarantor's rights under Chapter 4 of the PPSA (including the rights to object to the disposal method under section 137, to redeem the collateral under section 142, and to receive any surplus proceeds under section 140).
National Credit Code rights. Where the guarantee is regulated under the National Credit Code, the Notice must set out the guarantor's rights to request information about the credit contract and statement of account, to apply for a hardship variation, and to complain to the Australian Financial Complaints Authority (AFCA).
Variation notice provisions. Where the Notice relates to a proposed variation of the underlying credit arrangement, the Notice should explain the nature of the variation and advise the guarantor of their right to withdraw from the guarantee if they do not consent.
Independent legal advice reminder. The Notice should strongly recommend that the guarantor seek independent legal advice from a qualified Australian solicitor before responding, and provide information about free financial counselling services such as the National Debt Helpline.
Contact details and governing law. The Notice should provide clear contact details for the creditor and specify the governing law (state or territory).
Additional compliance elements for a Notice to Guarantor (Australia) used in Australia include: Under the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 1989, ASIC regulates financial products and services. The National Consumer Credit Protection Act 2009 (Cth) governs consumer lending. The Australian Taxation Office (ATO) applies stamp duty through state revenue offices. The Australian Financial Complaints Authority (AFCA) resolves consumer financial disputes. The Reserve Bank of Australia (RBA) sets monetary policy affecting interest rate obligations in financial agreements. Forms-legal.com provides this template as a starting point for Australia-compliant documentation.
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author = {{Forms Legal}},
title = {Notice to Guarantor (Australia) (Australia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/australia/financial/agreements/guarantor-notice-australia}},
note = {Free legal document template. Based on National Consumer Credit Protection Act 2009 (Cth)}
}Frequently Asked Questions
The obligation to give notice to a guarantor before enforcing a guarantee in Australia depends on the regulatory regime that applies to the underlying credit arrangement. Where the guarantee is regulated by the National Consumer Credit Protection Act 2009 (Cth) (NCCP Act) and the National Credit Code (Schedule 1) — that is, where the underlying credit is consumer credit provided to an individual for personal, domestic, or household purposes — the credit provider must first serve a default notice on the debtor under section 88 of the Credit Code, allowing at least 30 days for the debtor to remedy the default, before the credit provider can commence enforcement against the guarantor. Where the guarantee involves a registered PPSA security interest, the secured party must give the grantor (and, where relevant, the guarantor) notice of proposed disposal action under Chapter 4 of the PPSA, typically at least 10 Business Days before the proposed disposal. For commercial guarantees not governed by the Credit Code or PPSA, the obligation to give notice before enforcement is a matter of contract — the guarantee itself may specify a notice period, or the obligation may arise from common law principles of good faith and fair dealing.
At common law, a guarantor is discharged from its obligations under a guarantee if the creditor and the principal debtor materially vary the terms of the underlying credit agreement without the guarantor's knowledge or consent. This principle is known as the rule in Holme v Brunskill (1878). A material variation is one that could prejudice the guarantor — for example, an increase in the credit limit, an extension of the repayment period, a change in the interest rate, or a change in the nature of the obligation being guaranteed. Modern commercial guarantees typically include 'anti-discharge' clauses that preserve the guarantee notwithstanding any variation, extension, or amendment of the underlying agreement. If such a clause is present, the guarantor remains liable despite the variation. However, for consumer guarantees regulated under the National Credit Code, the credit provider must notify the guarantor of any proposed increase in the credit limit or other material variation before it takes effect, and the guarantor has a period within which to notify the credit provider that the guarantor does not consent to remaining liable for the variation.
The Australian Financial Complaints Authority (AFCA) is an independent external dispute resolution (EDR) scheme that handles complaints from consumers and small businesses about financial products and services, including credit contracts and guarantees regulated under the National Consumer Credit Protection Act 2009 (Cth). AFCA replaced the Financial Ombudsman Service, the Credit & Investments Ombudsman, and the Superannuation Complaints Tribunal on 1 November 2018. A guarantor who believes that the creditor has not complied with its obligations under the National Credit Code, the NCCP Act, the PPSA, or the AFCA scheme rules may lodge a complaint with AFCA free of charge at www.afca.org.au or by calling 1800 931 678. AFCA can make binding determinations requiring the creditor to compensate the guarantor, vary the terms of the guarantee, or take other corrective action, up to a maximum claim limit that depends on the nature of the complaint (currently $1,185,000 for credit facility complaints for primary producer businesses). The guarantor must first attempt to resolve the complaint directly with the creditor before lodging with AFCA.
Yes. Australian courts have a well-established jurisdiction to set aside guarantees obtained by unconscionable conduct, undue influence, or misrepresentation. The doctrine of unconscionability in Australia derives from equitable principles and from section 21 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)). A guarantee may be set aside where: (1) the guarantor was under a special disadvantage (such as lack of education, emotional dependency, or vulnerability); (2) the creditor knew or ought to have known of the disadvantage; and (3) the creditor took unfair advantage of that disadvantage in obtaining the guarantee. Guarantees provided by family members (spouses, parents, or children) of the principal debtor are particularly vulnerable to challenge on unconscionability grounds, because the guarantor may have provided the guarantee under emotional pressure without fully understanding its consequences. The best protection for a creditor against such challenges is to requires the guarantor obtains independent legal advice from a qualified solicitor before signing, and to obtain a certificate from that solicitor confirming that independent advice was given.
A guarantor who receives a Notice to Guarantor has several important rights. The right of redemption allows the guarantor to satisfy the secured obligation in full before the creditor disposes of any secured collateral, thereby preventing the disposal and preserving the guarantor's right to recover from the principal debtor. Under section 142 of the PPSA, a grantor (or a person with an interest in the collateral) may redeem collateral at any time before the creditor has disposed of it or entered into a contract for disposal, by paying all amounts owed to the creditor. The right of subrogation means that, once the guarantor pays the creditor in full under the guarantee, the guarantor steps into the creditor's shoes and acquires all of the creditor's rights against the principal debtor, including any security interests registered on the PPSR. The guarantor may then enforce those rights against the principal debtor to recover the amounts paid. The right of contribution means that, where there are multiple co-guarantors, a guarantor who has paid more than their proportionate share may seek contribution from the other co-guarantors.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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