Protection of the rights of guarantors

The law provides for the limits of the guarantor's liability and cases of termination of the guarantee. Therefore, if the creditor has filed a claim against the guarantor, this does not mean that the guarantor will have to pay. We have extensive experience in handling this category of cases and positive judicial practice in challenging surety agreements.

We are ready to offer you the following legal services:

• Representing the interests of the guarantor in court;
• Appeal against court decisions made against the guarantor;
• Cancellation of court orders and default judgments;
• Refund of funds paid by the guarantor under canceled court orders;
• Filing an application for installment plan or deferment of execution of a court decision;
• Collection of debt from the main debtor, upon fulfillment of the obligation by the guarantor;
• Carrying out bankruptcy of guarantors - individuals.

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Challenging a surety

A guarantee is one of the common ways to secure a loan agreement, leasing, government contract and other obligations. Under a guarantee agreement, the guarantor undertakes to be responsible to the creditor of another person for the latter’s fulfillment of the obligation in whole or in part.

A surety agreement is always concluded in writing. The guarantee agreement always specifies the basic conditions of the secured obligation, the size, limits and period of liability of the guarantor.

In most banks, a guarantee is a prerequisite for obtaining a large loan. When lending to businesses, banks often try to minimize their risks by obtaining a guarantee from the company’s founders and general director.

Liability of the guarantor

The law distinguishes between two types of liability of the guarantor under the contract: joint and several and subsidiary. The liability of the guarantor is considered joint and several if the contract or law does not provide for subsidiary liability.

Joint and several liability provides that the guarantor is liable to the creditor to the same extent as the debtor, including payment of interest, reimbursement of legal costs for debt collection and other losses caused by non-fulfillment or improper fulfillment of the obligation by the debtor.

Vicarious liability provides that the guarantor is liable in an amount clearly limited by the terms of the contract.

Meanwhile, concluding a surety agreement does not mean that a person has signed a “sentence” for himself and will certainly be responsible for the main debtor. Current legislation allows guarantors to take an active position in protecting and asserting their rights.

According to Art. 364 of the Civil Code of the Russian Federation, the guarantor has the right to raise objections against the creditor’s claim that the debtor could present. The guarantor does not lose the right to these objections even if the debtor renounces them or admits his debt.

Rights of guarantors

According to Article 364 of the Civil Code of the Russian Federation, the guarantor has the right to object to the creditor’s claims. The guarantor does not lose the right to these objections even if the debtor renounces them or admits his debt. Thus, it does not matter whether the main borrower has admitted his debt or whether a court decision has already been made against him and enforcement proceedings are in full swing, the guarantor in any case has the right to protect his rights and defend his legitimate interests by all not prohibited means, including the requirement to recognize the guarantee agreement as terminated or invalid.

When, if the guarantor has fulfilled the secured obligation for the principal debtor, the rights of the creditor under the obligation are transferred to him, including the rights that belonged to the creditor as a pledge holder to the extent of satisfied claims. In addition, the guarantor has the right to demand from the debtor payment of interest on the amount paid to the creditor and compensation for other losses incurred in connection with liability for the debtor.

Termination of guarantee

Article 367 of the Civil Code of the Russian Federation provides for 4 grounds for termination of a guarantee (the list of these grounds is not exhaustive):

• The guarantee is terminated due to the termination of the obligation secured by it;
• Also, the guarantee is terminated with the transfer of the debt under the secured obligation to another person, if the guarantor did not give the creditor consent to be responsible for the new debtor;
• The guarantee is terminated if the creditor refuses to accept the proper performance proposed by the debtor or the guarantor;
• The guarantee terminates upon the expiration of the period for which it was given.

At the same time, it should be noted that upon liquidation of the main debtor, the guarantee is terminated only if the claim against the guarantor was brought after the completion of the liquidation procedure.

In case of bankruptcy judicial practice proceeds from the fact that the guarantee is considered terminated, if the creditor filed a claim in court after information about the company’s bankruptcy was entered into the register.

The death of the borrower does not automatically terminate the guarantee. Upon the death of the borrower, the guarantee terminates, if the guarantor did not agree to be responsible for possible heirs, otherwise, the guarantor is responsible for the fulfillment by the heirs of the borrower’s obligations transferred to them. If there is no inherited property, the guarantee is terminated.

If the obligation secured by the guarantee was changed without the consent of the guarantor, which entailed an increase in liability or other adverse consequences for the guarantor, the guarantor responds on the same terms.

If the validity period of the guarantee agreement is not established, or the conditions regarding the period do not comply with the requirements of the law, the guarantee is terminated if the creditor does not file a claim with the guarantor within a year from the date of the deadline for fulfillment of the obligation secured by the guarantee. When the deadline for fulfillment of the main obligation is not specified and cannot be determined or determined by the moment of demand, the guarantee is terminated if the creditor does not file a claim against the guarantor within two years from the date of conclusion of the guarantee agreement.

You should not hope that the courts will figure it out on their own and reject the bank’s claim or reduce the size of the claims submitted by the creditor. From our practice it follows that for judges, the requirements for the guarantor are equivalent to the requirements for the main debtor, and if the guarantor does not receive motivated objections, then, as a rule, the court makes a decision to collect the debt from the guarantor at the very first court hearing. The civil process is adversarial, which means that you yourself must formulate your legal position on the case and bring it to court.

In our judicial practice, there are a large number of cases won against banks, as a result of which the guarantors were released from liability in whole or in large part.

Bankruptcy of guarantors - individuals

On October 1, 2015, the law on bankruptcy of individuals (citizens) came into force. If the debt was collected from the guarantor by a court decision and a subsequent appeal against such a court decision did not bring any results, then bankruptcy is the only chance to write off the debt.

Bankruptcy if the guarantor is unable to repay the debt is legal, especially since you are not a borrower, have not received the money, and are unable to repay the debt due to objective reasons.

Considering that the law on bankruptcy of individuals has only just come into force, it is not possible to talk about all the possible negative consequences of bankruptcy for the guarantor.

Currently, the following negative consequences of bankruptcy are highlighted:

Obligation to notify future creditors about the bankruptcy procedure within 3 years;

Inability to go bankrupt more than once every 5 years.

The positive consequences of bankruptcy of guarantors include:

From the moment the bankruptcy procedure begins:

The accrual of penalties (fines, penalties), interest and other financial sanctions on all obligations of a citizen ceases;

Collection from a citizen for all enforcement documents is terminated, with the exception of enforcement documents for claims for compensation for harm caused to life or health, for payment of compensation in excess of compensation for harm, as well as for claims for the collection of alimony. This also means that all restrictions imposed by the bailiff on the debtor are lifted.

After completion of the bankruptcy procedure, the guarantor declared bankrupt is released from further performance of obligations.

​​In what case do the obligations of the guarantor terminate and how can the guarantee agreement with the bank be terminated? A guarantee involves the voluntary assumption of responsibility for fulfilling obligations under the loan agreement, which in fact means bearing jointly and severally with the borrower the full responsibility for the loan. However, unlike the borrower, the status of the guarantor is more vulnerable, since, without receiving any property benefits, he, for the most part, always risks finding himself in an “extreme” situation, and through no fault of his own. It is for this reason that close relatives or very good friends, as a rule, act as guarantors. But, alas, they are often deceived in their expectations of the borrower’s proper performance of his duties. As a result, guarantors quite often have a desire to refuse the guarantee or terminate it. Today we will talk about whether a guarantor can refuse a guarantee (including a mortgage), and how this can be done.

Unfortunately, without compelling reasons clearly set out in the law, the guarantor does not have the right, at his own discretion, to refuse the loan guarantee or demand termination of the agreement.

Termination of guarantee

How to refuse a loan guarantee? The grounds for termination (refusal) of a guarantee are set out in Article 367 of the Civil Code of the Russian Federation:

1. Termination of the guarantee period.
2. Termination of a debt obligation secured by a guarantee. This basis may imply both the repayment of the debt by the borrower and other cases of termination of the loan.
3. Transfer of a credit debt to another person without the express consent of the guarantor to assume responsibility for this debtor.
4. Refusal of the bank to accept the proper performance of the loan debt proposed by the borrower or guarantor.

note : the law clearly provides that the guarantee does not terminate, and the guarantor continues to bear responsibility according to the original terms of the contract in the following cases:

• Death of the debtor.
• Changes in the terms of the loan, even if they worsen the position of the guarantor, create unfavorable consequences for him and the guarantor does not agree with them. The guarantor has the right not to comply with new (changed) conditions, but will be obliged to comply with those that remain unchanged. Moreover, when acting as a guarantor, it is necessary to carefully study the terms of the contract. They often contain a provision that the guarantor agrees in advance to be liable to the bank under the changed terms of the loan agreement, even if they worsen the guarantor's position compared to the previous conditions.

The grounds for termination set out in the law are exhaustive, but the terms of the contract can improve the position of the guarantor, and the limits of his liability are limited, for example, by bearing subsidiary (additional) liability. In banking practice, this is quite rare, but the law leaves the parties freedom of action, as well as the possibility of the guarantor to apply for early termination of his obligations or satisfaction of the refusal of the guarantee.

Refusal of guarantee

Refusal of a guarantee is a voluntary and early withdrawal from the guarantor of loan obligations. In this case, reasons and motives are not so important. The main thing is that both the borrower and the lending bank give their consent.

The procedure for expressing a refusal and following the procedure for accepting it will be as follows:

1. The first step is to agree on the issue of waiving the guarantee with the borrower. If the latter does not object to this, then it is wiser to jointly prepare reasoned proposals for the bank to change the terms of the agreement in terms of ensuring its execution. Typically, the most compelling arguments for the bank are proposals to replace the guarantor with another person (with his consent, of course) or to replace the guarantee with another type of security, for example, a pledge. Alternatively, you can offer partial early repayment of the debt so that the remaining portion does not require any type of collateral.
2. To comply with all formalities, the guarantor must send the borrower a notice of refusal of the guarantee and obtain written consent to this.
3. Next, the guarantor prepares and sends a statement to the bank, outlining and motivating his request to satisfy the refusal of the guarantee. It is highly desirable that the notification detail and justify the grounds and reasons for this. The written consent of the borrower, as well as the agreements reached with him regarding the resolution of the debt situation (new guarantor, collateral, early partial repayment of the loan, etc.) can be attached to the application.
4. The borrower, who has expressed his consent to both the guarantor’s refusal of his obligations and the new conditions for securing them, must prepare his own application for the bank, in which he sets out a request to change the terms of the agreement, formulates and justifies such changes.
5. After considering the applications and documents received from the guarantor and the borrower, the bank makes a decision either to change the terms of the loan or to refuse to satisfy the applicants’ request.

If the bank makes a positive decision, usually the original contract is terminated by agreement of the parties, and a new one is drawn up. In this case, the procedure for concluding a new loan agreement will be similar to the procedure for drawing up the previous agreement, that is, the borrower will be required to provide the entire package of documents provided by the bank. Accordingly, when replacing one guarantor with another, it will be necessary to provide documents in this part. In some cases, it is possible to maintain the previous loan agreement with amendments to it in the form of an additional agreement. This does not in any way affect the legal validity of the former guarantor’s refusal of his obligations and the release of liability from him. But in order to avoid problems, it is advisable for the refused guarantor to receive an official written notification from the bank about the termination of the agreement or amendments to it.

As you know, the most popular way for banks to secure their money and ensure fulfillment of obligations to repay loan funds is to introduce a loan collateral or guarantee. To minimize risks, banks introduce both protection options.

What is a surety? Surety- this is the surest way to ensure the fulfillment of loan obligations.

Based on the requirements of the guarantee agreement, the private person - the guarantor undertakes to the creditor bank of another private person to bear responsibility for the actions of this person in relation to the fulfillment of the loan obligations undertaken by him, partially or in full.

The guarantee is drawn up on a contractual basis, the parties to this agreement are, on the one hand, the bank, on the other hand guarantor. The terms of the surety agreement must include answers to the questions: who is the creditor, what obligations are guaranteed to be fulfilled and to what extent, and for whom the surety is issued. In order for an agreement to have legal force, it is not required to be certified by a notary, and there is also no need for state registration.

In simple terms, a guarantee agreement implies the transfer of the payer’s responsibilities to the guarantor in the event of the payer’s refusal to fulfill its obligations under the loan agreement to the bank.

When does a bank require a guarantor?

— If the borrower is too young or has insufficient work experience
— When the borrower is unable to document his income, or he simply does not have it
— When a large loan does not require the use of collateral, or the borrower wants to increase the amount of the loan issued
— When the borrower is not registered in the region where he is applying for a loan

The above points do not mean that in such situations banks do not lend without the involvement of guarantors - they issue, only in such cases the interest rate on the loan increases significantly, or the lending conditions will be much worse.

The fact is that when a guarantee agreement is drawn up, the bank additionally insures itself against the appearance of a “bad” loan, also simultaneously reducing the risk of issuing a loan to an unscrupulous payer. After all, when drawing up such an agreement, the bank receives all the information about the guarantor: he has to provide a passport, income certificate, and other documents.

Only a person with good income can become a guarantor; they should be enough to repay the loan amount and interest on it.

What does the guarantor risk, what does the guarantee threaten him with?

The task of the guarantor when lending is quite simple, at first glance - he must bear the same responsibility for repaying the loan as the payer. In the event that the payer refuses to pay the loan, or cannot pay for reasons beyond his control, the bank will turn to the guarantor to repay the loan, with interest.

The right of the bank to demand repayment of the loan from the guarantor is confirmed by law: paragraph 1 of Article 363 of the Civil Code of the Russian Federation states - “In the event of non-repayment or incorrect performance by the borrower of the obligation secured by the guarantee, the debtor and his guarantor will be jointly and severally liable to the creditor...”. This only says one thing: if the borrower does not return the money, the guarantor will have to return it. And this is clearly described in the surety agreement.

Unless otherwise stated in the guarantee agreement, the guarantor’s liability to the lender is the same as that of the borrower, including:
- repayment of the loan body
- payment of accumulated interest on the loan
- payment of the resulting penalty, if it is specified in the contract
- if it comes to litigation - payment of legal costs for debt collection, or other expenses of the creditor (bank), which will be caused by non-fulfillment or incorrect fulfillment of obligations under the guarantee agreement and the loan agreement.

It is worth noting that joint or subsidiary liability is always provided for under a surety agreement. Subsidiary form liability for the guarantor is better, since the bank will first demand repayment of the debt from the borrower, and only if it is impossible to collect the debt from him, the bank goes to the guarantor. At joint liability, in the event of any situation in which questions arise, both the borrower and his guarantor are called to answer.

One more point to remember. As you know, if payments are not made on a loan on time, then a so-called "negative" credit history. Moreover, not only the borrower, but also the guarantor is included in it! Information about guarantors who were unable to repay the borrower's debt also ends up in the credit history bureau. After all, when a surety agreement is concluded, the guarantor signs a huge number of papers together with the borrower, and, accordingly, together with him agrees to transfer information about himself to third parties. And the guarantee agreement states that the guarantor agrees to transfer information about himself to. Although everyone knows that when a bank issues a loan, it is he who dictates all the conditions. And neither the borrower nor the guarantor will be able to change them. But it is worth remembering that negative information about the guarantor will be sent to the credit history bureau only if the bank demands that the guarantor repay the debt, but he will not do so.

The rights of the guarantor are enshrined in law and are spelled out in Articles 364 and 365 of the Civil Code of the Russian Federation. Everyone should know them and be able to use them. The guarantor has the right:

Raise your objections to the bank’s demands, which the borrower could satisfy, unless otherwise follows from the guarantee agreement. This is provided in case the bank violates the loan agreement and, accordingly, the guarantee agreement.
- take away the bank's rights under the guarantee obligation, if the guarantor has fulfilled its part of the obligations and paid off the borrower's debt to the bank. The rights to collect the debt are transferred by the creditor to the guarantor in the form of a signed agreement, as an assignment of the claim, in the amount or quantity of the debt paid.
- has the right, after paying off the debt for the debtor, to demand from him the payment of interest for the amount that he paid to the creditor, you can also demand compensation for any losses associated with bearing responsibility for the borrower.
- has the right to receive from the bank all documentation confirming the lender’s claims to the borrower, and, accordingly, all the rights that secure this claim. In order to be able to provide the borrower with a request for the return of funds (the possibility of legal proceedings is not excluded), the guarantor must have on hand documents - an agreement on the transfer of rights of claim, a guarantee agreement, documents on payment of debt (receipts and checks), a copy of the loan agreement and some others documentation.

If the guarantor has paid all his debts for the borrower, then in accordance with the law he can recover from him all the money spent, the amount of which will also include interest on the loan, penalties, the amount of money spent on the court, and in addition you can receive compensation for moral damage and wasted personal time. According to Article 365 of the Civil Code of the Russian Federation, after the bank confirms the full payment of the guarantor for the borrower, the debtor is completely released from any liability to the bank, but already becomes a debtor of the guarantor.

When a guarantor is released from debt

We are considering the case of a guarantee for an individual borrower

In the case where the debtor is a citizen of Russia, and when he dies, should the guarantor repay his loan debt to the bank? The answer to this question is in paragraph No. 1 of Article 418 of the Civil Code of the Russian Federation, which states that the debtor’s obligations to the bank are terminated by his death, if the fulfillment of the obligations cannot be carried out without the personal participation of the borrower, or the obligation is inextricably linked in any other way with the identity of the borrower. Based on the paragraph of this article, it is clear that the death of the debtor entails the termination of his obligations, unless the obligation to perform is transferred as succession to the heirs of the borrower, or other persons described in this law. In other words, if the debtor died and he has no legal successors, the guarantors do not bear any obligations to the bank, since any obligations are terminated by the death of the borrower.

Guarantee inheritable

But let’s imagine a situation where the parents, who were guarantors, die, and you, in relation to them, are the direct heirs in the first place. That is, you may have to repay the debt of an unscrupulous borrower, whose guarantors they (the parents) were. Let's clarify - will the obligation to repay the debt pass to you by inheritance?
The answer to this question is given by the Supreme Court of the Russian Federation, which explained the following: the heir will be liable for the obligations of the testator-guarantor to the bank only to the extent of the value at which the inherited property is valued. For the remainder of the debt, surety obligations are terminated due to the fact that they cannot be fulfilled. If the heir refuses to enter into the inheritance, the obligation to repay the debts of the deceased guarantor-parents does not fall on him.

Guarantee in relation to the borrower-organization (legal entity)

A guarantor is an individual who assumes responsibility to the borrower's bank (lender) for the fulfillment of his obligations to repay the debt in full or in part. In case of non-fulfillment or improper fulfillment by the borrower of an obligation supported by a guarantee, the debtor and the guarantor bear joint liability, that is, on equal terms. The guarantor will be liable to the bank to the same extent as the payer, including payment of legal costs, accumulated penalties, and other costs of the creditor in relation to collecting the debt from the debtor.

Based on Article 419 of the Civil Code of the Russian Federation, the obligations of any organization will be terminated as soon as it is liquidated. And in accordance with Article 367 of the Civil Code of the Russian Federation, the guarantee will be terminated with the termination of the obligation secured by it (payment of debt), in addition, in the event of a change in this obligation, which entails an increase in liability or some other adverse consequences for the person guarantor, without his knowledge or consent . It turns out that if, when the organization ceases to exist, all its obligations to creditors also cease, then the obligations of the guarantors to these creditors (the bank) also cease.

When does the guarantee end?

If you do risk guaranteeing for someone, you need to know when your obligations as a guarantor will end. The Civil Code of the Russian Federation regulates this as follows:

The guarantee is terminated with the complete termination of the obligation secured with its help. That is, when the debtor pays off the loan himself, the guarantee agreement will be automatically completed.
- if changes are made to the main obligation (loan agreement), which entail an increase or tightening of liability or other adverse consequences for the person who is guarantor, without his consent, in this case the guarantee agreement also terminates.
- the guarantee may be terminated if the debt secured by the guarantee obligation was transferred to another person, and the guarantor did not give his consent to be responsible for another person (the new debtor).
- the guarantee agreement will be terminated upon expiration of the period for which it was concluded. If such a period is not specified in the agreement, then the guarantee will be terminated if the bank does not file a lawsuit against the guarantor for this debt after a year from the date of fulfillment of the obligation secured by the guarantee. When it is not possible to establish the deadline for the fulfillment of the main obligation under the loan, and it is not expressly specified or determined by the moment of demand, the guarantee will be terminated when the creditor does not bring a claim against the guarantor after two years have passed from the date of signing the guarantee agreement.
- the guarantee can be terminated by terminating the guarantee agreement between the guarantor himself and the creditor.

There will be no guarantee if the guarantee agreement is declared invalid. For example, according to paragraph 3, Article 329 of the Civil Code of the Russian Federation, recognition of the invalidity of a loan agreement entails the invalidity of the guarantee agreement. Also, a guarantee agreement may be declared invalid on other grounds provided for by the Civil Code of the Russian Federation.

Summarize, guarantee is not just a formality, which your friend needs to get a loan. By vouching for him, you must realize that you are also accepting responsibility to the creditor, which will consist of an obligation to repay the debt for him if he cannot do this himself. When deciding to take this step, you must be aware that you will have to repay someone else's loan, and you may not be able to cope with this.

But at the same time, you should not be afraid to be a guarantor. Creditors only in the most exceptional cases assign full responsibility for the debtor to his guarantor. For example, statistics show that only one case out of ten is unsuccessful for the guarantor, and he has to repay the borrower’s debts.

Many people agree to be guarantors for a loan, believing that this is a simple formality. However, a guarantee imposes serious responsibility on a person. After all, if the borrower fails to pay the loan debt, he will have to do it for him. What is the responsibility of the loan guarantor and can it be avoided?

Who is a guarantor and when is one needed?

A guarantor is a citizen who is responsible for the obligations of the debtor, but does not have the right to money issued by the bank and benefits acquired with their help. Not every person can acquire this status, because creditors have certain requirements for them.

A person who meets the following criteria can enter into a surety agreement:

• Age from 21 years.
• Stable salary.
• Official employment.
• Availability of property.
• Positive credit history.
• Russian citizenship.
• Registration in the region where the bank is located.

Guarantors are involved when a loan is issued for a medium or large amount. They are also required if the borrower is of a certain age, when there is a high risk of non-payment of debt due to deteriorating health. This usually applies to debtors over 60 years of age.

For large loan amounts, the lender has the right to require two guarantors. Preference is always given to relatives; banks are more willing to accept them. When one spouse takes out a mortgage loan, the second one necessarily becomes a guarantor.

What responsibility awaits the guarantor?

The obligations of the guarantor are specified in the surety agreement, and liability is also discussed there. It arises from the date of signing this agreement, but occurs only in the event of failure by the debtor to fulfill the loan obligation.

There are two types of guarantor liability if the borrower fails to repay the loan:

1. Solidary, implying equal obligations of the guarantor and the debtor.
2. Subsidiary, which occurs only after proving the fact that the borrower does not have the ability to repay the debt.

If several guarantors took part in processing the loan, then they are all responsible to the lender.

If the client violates debt obligations, the bank turns to the guarantor and demands that he pay not only the principal debt, but also interest, as well as penalties.

The creditor also has the right to collect the debt by seizing real estate owned by the guarantor, with the exception of the only residential premises purchased with a mortgage loan.

Guarantor risks

Not only is the loan guarantor liable if the debtor fails to repay the loan, but there are also negative consequences. A citizen, agreeing to a guarantee, must understand that he is at great risk. The consequences may be the following:

1. Material losses. The citizen will have to pay not only the borrower’s principal debt, but also accrued interest, fines, and penalties.
2. Deterioration of credit history. If there is an overdue debt, negative entries will be made in the guarantor's history.
3. Bank refusals to provide loans or restrictions on lending conditions. When considering the application, the lender checks the availability of a guarantee agreement in other institutions. If there is one, then the credit limit is calculated taking into account existing obligations. As a result, a person will not be able to get the desired amount of money. Banks may also refuse to issue a loan due to a negative credit history.
4. Loss of property. If the guarantor is unable to repay the borrower's debt, the borrower's property will be foreclosed on. As a result, the property will be sold at auction, and the proceeds will be used to pay off the debt.

These risks are quite serious, so if you are not sure that the debtor will repay the loan, you should not agree to a guarantee.

Is it possible not to answer for the borrower's obligations?

Lawyers often ask how a guarantor can avoid liability for a loan? There are some nuances that will help you achieve relief from debt repayment or reduce the amount of debt. These include the following:

• Invalidation of the guarantee agreement. This can only be done if there are errors in the contract or the rights of the guarantor have been violated. To do this, you need to find a lawyer who will thoroughly check the agreement.
• Hiding property and taking an unofficial job. This is an illegal method of getting rid of debt. If it is revealed and proven that the guarantor intentionally committed these actions, he will face serious liability.
• Declaring the guarantor incompetent. If this status is fictitious, then the citizen will face unpleasant consequences. The bank can go to court to order an examination, which can easily prove the absence of incapacity.

Thus, it is very difficult for a guarantor to legally obtain release from liability, and circumvention of the law entails negative consequences.

When do the guarantor's obligations end?

Obligations under the guarantee agreement end in the following cases:

• Repayment of a debt.
• Changes to the terms of the contract made without the consent of the guarantor.
• Expiration of the obligation.
• No requirement for the guarantor to pay the debt within a year.
• Voluntary consent of the borrower and the bank to terminate the guarantee agreement.

The situation when the borrower dies requires special attention. In this case, the heirs must be responsible for his debts. Unlike the guarantor, they repay the debt only within the limits of the share of the inheritance they receive, that is, they do not have to spend their own savings.

If the guarantor has already managed to repay the debt for the heirs, then he has the right to go to court with a request to recover the amount of money paid from them.

Thus, the guarantor is liable for the debt of the borrower if the latter cannot repay the debt and does not have property to sell against the debt. Agreeing to a guarantee is fraught with negative risks, including the loss of real estate, so you should think a hundred times before taking part in applying for a loan.