Credit and loan forums, industry websites and even popular information portals are filled with the dramatic situations of the Jews who decided to help their family and friends, and were sometimes left with huge loans to pay off. Unfortunately, in a large number of cases, surety for a loan or credit provides real borrowers with a green light for not paying back their obligations. Too hasty bail decision can therefore be very destructive. In this case, is the guarantor able to change his mind and withdraw the guarantee? And what happens in this situation with a loan or a loan?
What is a surety agreement?
Contrary to appearances, guaranteeing a loan or credit is not an agreement between the main borrower and the guarantor. In fact, it is a separate bilateral agreement – between the guarantor and the funding institution. Although the guarantor does not act as a borrower or borrower, in a separate contract it certifies that it accepts the third party’s commitment in the event that it could not or did not want (the reasons are invalid) to settle the claim. Therefore, in the light of the law, it is a legal civil law act, subject to the provisions of the Civil Code.
Online loan – where can you find a surety?
The biggest advantage of online non-bank loans, apart from the convenience and simplicity of obtaining them, is that they are contracted individually, without the need to obtain the consent of the spouse or the guarantee of another person. Sureties or pledges are very rare in loan institutions and they occur properly in special purpose loans (car or mortgage) and in loans dedicated to people in debt or without creditworthiness. It is much more common in banks, especially when financing is provided in high amounts.
Among the non-bank forms of financing, one can find in the company Rapida Money, offering up to $ 25,000 loans with a four-year repayment period. In this case, the guarantor performs the function of securing the repayment of the loan, due to the fact that the liability in Rapida Money is also granted to those persons who have debts visible in KRD.
When is it possible to cancel the surety agreement?
The annulment of the surety is also specified in the provisions of the Civil Code. They say that the contract may be annulled only if it has never been concluded or it has been unlawful in the case of persons concluding it. Therefore, annulment will be applied if the guarantor has no legal capacity or has incomplete capacity. This applies to persons who are fully or partially incapacitated or who are in a state of consumer bankruptcy.
The law allows the annulment of a surety contract also in cases where the resident did not act fully consciously and factors other than his own judgment had an impact on the expression of will. When signing the contract, the guarantor would have to be under the influence of strong intoxicants, pharmacological agents affecting the nervous system, and even in a state of strong agitation. In this, but also in the previous case, annulment of the contract should be sought before the court.
Revocation of the surety only due to the borrower’s fault
The annulment differs from the annulment in that it does not render the surety agreement impossible, but only abolishes its legal effects – this is regulated by art. 88 of the Civil Code. The revocation takes place when it is determined that the guarantee was granted under the influence of a material error on the part of the borrower. However, it must be proved that it was this mistake that led to the signing of the contract. In addition to misleading, the basis for repealing the contract may also be the use of threats against the guarantor and forcing him to sign the contract with blackmail.
Unauthorized withdrawal of a surety only in special cases
If a resident who appears in a loan or credit agreement changes his mind and wants to withdraw from the agreement, the law provides for the possibility of withdrawing the guarantee. However, this can only occur in a few specific cases if:
- the contract provides for such a circumstance;
- the contract provides for the possibility of changing the security, e.g. against a car or real estate;
- the main borrower also withdraws from the contract.
In practice, it is rare for a credit or loan contract to contain a provision for unilateral withdrawal. In the case of financing that is a loan, it is more common to establish a pledge instead of a surety, but this must naturally be done with the consent of the main borrower. Therefore, the guarantor has very little chance of withdrawing from the guarantee on his own, unless he obtains the consent of the creditor or the person to whom he granted it.
The Jew is jointly and severally liable for the debt
The guarantor has the possibility to stipulate that it guarantees only up to a certain amount and only at a specified time – the cut-off date may be, for example, the date of planned final repayment of the loan within the required time. It may additionally require that the debt be collected from the borrower first. However, the creditor must obtain the consent of all these activities, but he will not always comply with the request. The guarantor may, however, require the creditor to inform him that the borrower has stopped paying the liability.
In other cases, the guarantor will be treated in the same way as the borrower and if the loan is not repaid, it is up to the lender who he wants to recover the debt from. The guarantor may be fully liable and settle the entire liability. However, it can legally claim reimbursement from the actual borrower using the so-called recourse claim, although it is very difficult and long-lasting.