[SIZE=3]GUARANTORS BEWARE[/SIZE]
[SIZE=3]Sureties and Guarantees[/SIZE]

[SIZE=3]When it comes to loans, you’ll soon come across friends, colleagues and sometimes even strangers who will ask for your assistance for you to act as a co-maker or guarantor. Maybe it’s for a small business they are setting up, or just to tide them over a passing domestic shortfall. It would do you well to understand what you are signing up for when you do.[/SIZE]

[SIZE=3]It’s hard to say no in such instances because the implied premise is instead of borrowing from you, a friend is just asking you to vouch for his or her credit to the lender, which is not such a big deal. But you may just discover that you signed up for more than you bargained for when the creditor decides to collect from you directly.[/SIZE]

[SIZE=3]How does this come about? This happens when you are asked to act as a guarantor or surety for a loan. This is covered by one provision in the New Civil Code:[/SIZE]

[SIZE=3]"ARTICLE 2047. By guaranty a person, called the guarantor, binds himself to the creditor to fulfill the obligation of the principal debtor in case the latter should fail to do so. [/SIZE]

[SIZE=3]If a person binds himself solidarily with the principal debtor, the provisions of Section 4, Chapter 3, Title I of this Book shall be observed. In such case the contract is called a suretyship. (1822a)"[/SIZE]
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[SIZE=3]Read on at [/SIZE][SIZE=3]http://thelegallyinclined.wordpress.com[/SIZE][SIZE=3] . Feel free to forward the link to your friends and colleagues. And leave some feedback if you can.[/SIZE]