What is a potential cost associated with personal sureties?

Personal sureties often involve the pledge of personal assets, which can include real estate. When a personal surety provides a bond, they are essentially guaranteeing the obligations of the principal. If the principal defaults on their obligations, the surety may have to cover the loss, which can force them to liquidate or lose the pledged assets. This makes the risk of losing real estate or other significant personal assets a tangible cost associated with personal sureties.

In contrast, while increased legal fees or higher premiums compared to corporate sureties might be considerations in certain situations, they do not specifically highlight the direct personal risk that comes with personal sureties. The option stating there are no costs involved overlooks the inherent risks and obligations undertaken by a personal surety, which are integral to understanding the financial implications of providing such a guarantee.