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How to initiate agreement cancelation of the guarantee

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 the Guarantee on the credit  is one of forms of support which essence consists in granting to bank or other financial institution of guarantees of timely execution by the borrower of conditions of the concluded bargain. If the client is not able to repay the loan, the creditor acquires the right to attract the guarantor. As a result the guarantor who can demand indemnification later is responsible for depositing funds, having submitted the statement of claim for the unfair debtor.

of   How to become the guarantor?  

  According to the current legislation, the guarantee superimposes the duties connected to cancellation of a provided loan after recognition of the borrower insolvent for the objective reasons. However in practice it is simpler to creditor to attract the guarantor of the transaction at once after origin of any violations of the payment schedule. To protect the interests of guarantors, the contract in which the parties discuss conditions of cancellation of debt is signed.

  the Rights and obligations of guarantors of credit deals are stated in the Civil code. Guarantors usually take joint liability. In other words, the creditor has the right to require from the guarantor immediate cancellation of a loan if the client specified in documents allowed overdue payments. Some banks ask to specify to

  number of the settlement account and the debit card of the guarantor. In case of origin of problems with debt repayment, similar payment data will be used for receiving payments. Level of solvency of the guarantor is in addition checked. Jobless persons who do not gain stable income on a monthly basis are not allowed to the transaction.

of   the Guarantor is obliged:  

1. To respond on the borrower's debts.

2. To act as the contact person.

3. To make monthly payments.

4. Ahead of schedule to repay the debts.
 it is important

 ! Creditors have no right to require introduction of all amount one payment without obtaining the relevant decision of court. Only that part of a debt which the borrower did not enter before origin of overdue payments is subject to collecting. 


  Should not agree to the guarantee on others credit if the client of bank has notable problems with cancellation of debts. At first it is necessary to assess the possible consequences and risks. For the guarantor support the stranger of the transaction can be enveloped by big troubles, in particular loss of saving and personal property. the Guarantor undertakes to extinguish

of   

• The balance on the credit.

• Percentage charges.

• Commission payments.

• Penalties under the contract.

• Penalties and penalty fee.

• Legal costs.


  Unlike from borrowers the guarantors do not acquire the right to use borrowed funds. It will be possible to pay damages only through court after cancellation of others loan. The obligation to respond on the borrower's debts for many trustful citizens is the reason of additional expenses. You should not forget that the citizen who is taking part in the suretyship agreement undertakes to repay the debt with the commissions, percent and penalties calculated earlier.


  Risks of the guarantee on the credit  


  If the guarantor refuses to repay the solidary debt, sanctions are imposed by a court decision taking into account conditions of the signed contract. Unreasonable punishment, including different penalties, a penalty fee and penalties, are cancelled by protest. It is necessary for affected party during judicial proceedings concerning return of debts to file a complaint to the creditor or to provide the documents proving the fact of illegal charge of sanctions.

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   Risks for the guarantor:   

 
 
1. Cancellation of someone else's expenditures and debts.

2. Involvement of the collection agencies.

3. Transmission of a debt to police officers.

4. An involvement in judicial proceedings.

5. Deterioration in a status of credit history.

6. Arresting of settlement accounts and cards.

7. Loss of property rights.

8. Restriction for trip abroad.
the Guarantor of the transaction can face

  companion problems. Punishment of the guarantor corresponds to sanctions which are imposed against borrowers. Obligations for cancellation of others loan can voluntarily be interrupted only in the consent of the parties, and the decisive word is reserved by the creditor. Joint liability is extremely dangerous to guarantors as the financial institution practically does not face any restrictions in the course of collecting the balance of debt from the third party.

  the Suretyship agreement can also provide subsidiary liability, more profitable to guarantors. According to conditions of the similar transaction, requirements to any guarantor are always imposed after an official failure of the borrower in satisfaction of all of the legal requirement of the creditor. If the debtor for any of several reasons does not fulfill the obligation, the guarantor will be involved in agreement performance.


  How to refuse the guarantee? 
 

  the Potential guarantor has the right to refuse guaranteeing the transaction until signing of documents. Otherwise coordination of the parties for termination of the signed contract is required. Physical persons and legal entities which are ready to take the financial responsibility on others credits make the decision on guaranteeing independently. Pressure from agreement parties or enforcement to signing of the contract of the guarantee is prohibited by the law. Provision of guarantees on the credit shall be exclusively voluntary decision.

  Chance to refuse the guarantee remains also in case of revision of conditions of the relevant contract. If the parties decide to execute restructuring or to introduce amendments in documents, the guarantor has the right to terminate the relations with financial institution and potentially the unreliable borrower. Besides any conditions of support are reconsidered in the course of refinancing and consolidation of debts. If the initial contract is closed, the guarantor has the right to refuse cooperation.

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  How to stop the guarantee?  


several methods of extinction of the guarantee in the conditions of the current agreement, in addition to those situations where the guarantor of the transaction can voluntarily refuse cooperation Exist. It is about cancellation or recognition of the contract invalid because of detection of hard errors. In remaining cases the guarantee cannot be stopped without receiving consent of bank. Even if between the borrower and the guarantor there will be irreconcilable disagreements and conflict situations, obligations will remain in force.

of   of the Prerequisite to extinction of the guarantee:  

1. Timely or early cancellation of debt.

2. Expiration of the contract according to the guarantee.

3. Transfer of operating debt on the third party.

4. Recognition of the invalid bargain concluded earlier.

5. Termination of the loan agreement.

6. The borrower's failure from receiving the credit within 14 days.


 It is important! The death of the debtor does not stop the guarantee. However the guarantor of the transaction can refuse introduction of means before appearance of successors. The hereditary mass includes all debts of the borrower, but the guarantor is responsible only according to specific obligations. After loan payout the guarantor claims for a share in inheritance. Even if the property of the deceased debtor passes into municipal property, the guarantor participates in a business deal. Nevertheless it is extremely difficult to pay damages in a similar case. 

  If needs to refuse obligations for good reasons, it is possible to try to find the person who is ready to guarantee the transaction instead of the initial guarantor. Banks do not oppose to changeover of the guarantor if to the place of the person with potential financial problems the person having excellent solvency comes.


  the Translation of a debt  

  the Translation of debt from the initial borrower on the third party allows to stop the guarantee quite legally. In the theory the guarantor can refuse support of others credit, however in practice the banks refuse to change terms of the contract. Creditors manage to avoid problems due to semi-legal frauds with notifications. If the guarantor in due time is not informed on change of the borrower, the financial institution will not receive an official failure in guaranteeing the changed transaction.

of   Cancellation of debt  

  the Simplest method of extinction of the guarantee consists in cancellation of the formed debt. Both the borrower, and the guarantor or at all the third party can make payments. To the creditor the source of receiving money on account of debt repayment is not important. Obligation fulfillment automatically interrupts security validity. From the guarantor additional actions are not even required.

 Is important! For confirmation of the fact of closing of the loan agreement it is recommended to receive help in the serving bank. This document is required also to guarantors who paid someone else's debt. In addition it is necessary to take the account statement and to collect receipts to prove the fact of arrival of payments from the guarantor of the transaction. 

  If the debtor refuses to repay a loan, the guarantor on own initiative can make payment. Both one-time payment, and cancellation of the balance for the considered credit throughout transaction validity period is allowed. The guarantor has the right to demand attraction of sozayemshchik and other guarantors to cancellation of a loan.

of   assumes Obligation fulfillment of the guarantor of the transaction: 

1. Independent initiation of process of cancellation by the direction of the letter to credit institution.

2. The appeal of the financial organization suits which took the responsibility on debt repayment.

3. Involvement of guarantors to introduction of payments on a secured loan through local court.

  from the moment of complete cancellation of debt, the person who paid others credit acquires the right to require from the debtor indemnification. The amount spent for execution of obligations together with percent, the commissions and other costs is forcibly collected from the borrower. As a result the guarantor of the transaction has an opportunity not only to require the material reimbursement of expenses, but also can claim for a share of the property received by crediting. For example, if the guarantor made 75% of all payments on a mortgage, he has the rights to two thirds of the real estate acquired by the debtor. Alienation is executed exclusively in court at the initiative of affected party.

of   Expiration of the contract
 
the slander Signed by the guarantor acts with
  on a stretch of strictly limited interval of time before the loan repayment specified in the transaction of the moment. However sometimes duration of the guarantee and main transaction does not coincide. For example, process of crediting can last five years, and support taking into account the signed contract is restricted to a half of the specified period. Besides the creditor has no right to insist on cancellation of a loan if the client or the guarantor of the transaction fulfills all obligations in advance.

 Is important! Some organizations are reinsured, increasing the duration of the agreement of support. Usually the guarantee stops in a year after closing of a credit deal if organization during this time does not file lawsuits. For contracts also the period of limitation period making three years works. 

  Documents consist in writing. It is possible to terminate the legal approved transactions only according to the mutual decision of the parties or through court. In the latter case it is necessary to provide proofs of the fact of violation of terms of transaction. To recognize the contract insignificant or debatable only the judge in case of the hard errors made at a stage of compilation of documents can. As a rule, all controversial transactions are terminated. Summing up of

  the result, it is possible to mark several available methods extinction of the guarantee. In case of refusal of the creditor from support removal, the person involved for guaranteeing the transaction reserves the right for revision of documents. Besides there are several situations when it is possible to get rid of obligations under the guarantee legally.
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