What happens to a personal guarantee the seller gave on a bank loan if their company goes bankrupt?

A personal guarantee is a separate obligation the individual owner gave directly to the lender, and it generally survives the company's bankruptcy — the lender can still pursue the guarantor personally for any shortfall even after the corporate debt has been dealt with through the bankruptcy process, since the guarantee isn't discharged just because the underlying corporate borrower's own debts are addressed there.

This matters to a buyer mainly indirectly. It doesn't create liability for you as the purchaser of the business's assets, but it does help explain why a seller facing this kind of personal exposure may be especially motivated to see a sale go through quickly, and why the lender holding the guarantee is often closely involved in reviewing or approving any sale of the assets that secure its loan. Understanding this dynamic can help you anticipate who actually needs to sign off on your deal, and why the seller's urgency may be genuine rather than a negotiating tactic.