The bank had almost given its customer the approval for the loan of €50,000 when, at the last moment, they guarantee wanted by the girlfriend. For the sake of her boyfriend, she signed the surety bond form. What was to happen, after all he had a good job and would later get his parents’ house.
After the separation, the guarantee fell into oblivion. The rude awakening came years later when the bank demanded that the guarantor pay a large amount.
Unfortunately, there is still a widespread view that a guarantee is only a formality and a token of love, and that in case of doubt it is immoral anyway. The urgent question then arises for guarantors: Can I defend myself against the claims of the creditor?
What is a guarantee?
By accepting a guarantee, the guarantor undertakes to vouch for the obligations of another to his creditors. Anyone who vouches for the loan liabilities of their partner is liable to the bank for the debts arising from the loan agreement. If the borrower is no longer able or unwilling to pay his loan, the bank can demand payment from the guarantor, even if the relationship has long ended.
When am I liable as a guarantor?
Of course, the bank can only demand payment if certain conditions are met. The suretyship must be effective. In addition, the claim for which the guarantee is given must exist. In part, however, it also depends on how the guarantee is specifically designed.
1. Written form
In any case, it is a requirement that you submit the guarantee statement in written form have given up. This means that you must either have signed the declaration of guarantee yourself or have your signature notarized. However, an electronically issued guarantee is not permitted.
2. no immorality
In exceptional cases, the guarantee may be void, for example due to immorality. According to the criteria established by the courts over the years, a guarantee for a loan is immoral, for example, if
- you had an emotional connection to the debtor, something through a close family relationship, marriage or a civil partnership,
- You are financially overwhelmed by the guarantee and
- You had no personal or economic interest in lending.
Other constellations can also be considered, so that it must be checked in each case on the basis of the specific situation whether there are indications of immorality.
3. no nullity for other reasons
A guarantee may also be void for other reasons. If you made a mistake when submitting the guarantee declaration or if you were deceived, you may still be able to contest your declaration. In some cases, a declaration of revocation may also be considered.
4. Existence of claims against the debtor
It is also a prerequisite that the credit claim for which you are to be liable as a guarantor has actually arisen and has not already expired.
5. Plea of Precedent
Actually, the creditor must first obtain an enforcement order against the debtor and then have tried in vain for enforcement before he can demand payment from the guarantor.
However, if you have taken on a guarantee for a loan from a bank, you can usually not rely on it, since the banks have almost always ruled out the so-called defense of advance action and there is regularly a directly enforceable guarantee on first request.
6. Amount of Liability
If the guarantee is limited to a certain amount, the guarantor is only liable for that amount (maximum amount guarantee).
7. Scope of Liability
It must also be clarified for which claim you, as the guarantor, have assumed liability. Because the claim that the bank now has against the debtor can result from a completely different reason, which the guarantee may not cover at all. In addition to the loan debt, the receivables also include interest and costs. The formulations in most guarantee forms also include these claims. However, the bank must not unreasonably extend liability, especially not through the pre-formulated clauses.
8. Statute of Limitations
Finally, it must be checked whether the statute of limitations has not already expired.
The bank’s claim against the guarantor regularly expires after three years. The period begins to run at the end of the year in which the guarantee becomes due. In the case of a directly enforceable guarantee, as is regularly requested by the banks, this coincides with the due date of the main claim. If this point in time was a long time ago and the running of the period was not suspended, you can defend yourself against the claim by pleading the statute of limitations.
The main claim can also be time-barred, which you can also rely on as a guarantor.
However, the specific circumstances of the individual case and the wording in the contracts and guarantee declarations are decisive.
9. Loss of Collateral
If the bank had other collateral for your claim and this has since been lost, this can also be a reason for you to be able to successfully defend yourself against the bank.
What can I do?
The list shows that there can be numerous reasons with which you can successfully defend yourself against a bank’s claims from a guarantee. However, it is important that you examine the claim more closely before you make a payment to the bank. Because in many cases the obligation to provide a guarantee does not automatically expire. A defense such as the statute of limitations requires that it be raised against the creditor. If you have already paid to the bank, this is no longer possible. You can then no longer claim your payment back.
