The guarantor may not pay for the borrower if the deadlines established by law have passed. Most cases require a trial. Payment can be avoided if the borrower is proven bankrupt, upon his death, or if the surety agreement is recognized as illegal.
When a special banking agreement is drawn up, the guarantor is responsible to the bank for the repayment of the loan in the same way as the borrower. With joint responsibility, a person must pay off not only the body of the loan, but also interest, fines and legal costs. If a person has become a guarantor under a loan agreement, and the borrower is in no hurry to pay off the debt, you can try different options before repaying someone else's debt.
First, you should study the loan agreement. Pay attention to the order of submission of claims. If the bank issues an invoice right away, you will have to pay off the debt. If you require a prior receipt of the court's decision, then you may not pay until you receive a copy of it.
There are a few things that are often overlooked:
- expiration of the contract;
- termination of the surety due to the death of the debtor;
- lack of a basic obligation;
- liquidation of the debtor or bankruptcy;
- recognition of the surety agreement as invalid.
Expiration date
The contract always contains information about the expiration date of its validity. Usually the date falls on the date of the end of the loan agreement. If the bank has not applied to the guarantor within 12 months from the date of the due date, then the debt may not be paid in the future.
In the event that the dates are not indicated in the official paper, then its effect is terminated if the creditor has not filed a claim within 24 months. This applies both to commercial or state-owned banks and when dealing with MFIs.
Debtor's death
By itself, this fact is not a reason for the termination of the obligations of the surety, but it may become a reason for going to court to terminate the contract. To obtain a positive result in the process of signing papers, one should not agree to be responsible for potential heirs.
A similar situation occurs with the death of the surety. This fact does not automatically terminate the agreement. If the borrower in such a situation stops paying the debt, then he falls on the shoulders of the guarantors. The only way to avoid this is to go to court.
Bankruptcy
You may not pay on other people's debts if you persuade the borrower to go bankrupt. When the main obligation is forgiven, the surety is automatically fulfilled. You will not have to pay under such an agreement, but at the same time you need to achieve a complete cancellation of the debt in the bank or terminate the agreement in court. The same should be done when it comes to liquidating a legal entity.
Recognition of a contract invalid
You can use this chance only if the main loan contract was made with violations. For example, it can be signed by bank employees who do not have the authority to do so, there is no written consent of the spouse, additional commissions were taken.
Thus, it is possible to avoid paying under the surety agreement, but this will have to be done through filing an application with the court. To obtain a positive decision, you will have to prepare well or seek help from specialists.
