A good friend is in financial trouble. "I don't need money from you, I just need a guarantor," she says. That sounds harmless at first. If you want to help quickly and unbureaucratically and act as a guarantor, you don't have to put money on the table right away. He only promises to help in an emergency – namely when someone else can't pay his debts. But there's a lot more to it than just a signature. Whether the brother-in-law wants to buy a new car, the grown-up children need a mortgage or the neighbor cannot finance his planned renovation without a guarantor – there are always reasons to ask someone for a guarantee. But be careful: If you really only want to do good, you can quickly fall into the trap and, in the worst case, end up with a pile of debts.
The surety is a unilateral contract
By law, a surety bond is a legal contract that obligates the guarantor to pay for the debts of another when the latter is unable to pay his creditor (often the bank). If necessary, the guarantor is liable with all his assets – for a service for which he receives nothing. The guarantor has obligations, but no rights in return. That is why guarantees are very one-sided and risky affairs.
Caution: "Who vouches, is strangled."
Not for nothing it is casually said: "Who bails, is strangled." Because creditors mercilessly come forward when it comes down to it. So if you want to help someone out of a jam, you should specify in writing exactly up to what amount you will step in. On pre-formulated surety bonds it is often stated that you waive the so-called "plea of anticipatory action". You should delete. Because then you can refuse to pay as long as the creditor has not "unsuccessfully caused" foreclosure against the principal debtor. You should also reject the "directly enforceable guarantee", where you have to pay immediately if your contract partner does not pay an installment. The bank then doesn't even try to go after the true debtor, but turns straight to the guarantor.
A guarantee cannot be cancelled
A guarantee cannot be cancelled. After all, security for the creditor is the meaning of the contract. However, the contract can be classified as immoral after the fact if you are not able to take on someone else's debt in the first place. Or if you were under emotional pressure when you agreed to it. For example, a wife who has no assets and only a low income does not have to pay for her husband's debts.
If you first agreed because you trusted – for example, your ex-husband – but now realize that his financial situation is deteriorating sharply, you can terminate him. This means that he must get rid of his debts as soon as possible, find a new guarantor or offer other security. Until that is accomplished (which is highly unlikely if cash is tight), however, you remain beholden to the creditor.
Whether the repayment will succeed is uncertain
With higher sums you take a big risk. Most experts therefore advise: hands off! While you have a right to get your money back from the person you are vouching for in the event of an emergency. But whether this will succeed is written in the stars. After all, the debtor must be extremely short of money, otherwise he would have been able to meet his obligations. In case of doubt, the rule of thumb is: only guarantee as much as you could give away if necessary without ruining yourself financially. Do not make this decision under time pressure. Think about it longer and, if necessary, seek advice from a consumer advice center or a lawyer.