What does it mean to be a guarantor? This person is someone who assumes the debts of another person if that person fails to pay them. 

In this article from Advogados em Braga, learn everything about what a guarantor is and what your rights are. 

I'm a guarantor and the debtor isn't paying: where do I start?

If it is guarantor If the debtor does not pay, there are steps you should take to settle the debts:

Confirm the situation with the bank or creditor: Check the amount owed, the due dates, and whether there are any formal notifications or ongoing legal proceedings.

Notify the debtor: Contact him to confirm if it's possible to settle the debt quickly. 

Evaluate the surety agreement: Check if the debtor has waived the right to prior execution. If not, the creditor must first seize the debtor's assets before proceeding against the debtor.

Consider PERSI: Request inclusion in the Extrajudicial Procedure for Regularizing Default Situations (PERSI). You have 10 days after notification to request this from the bank.

Seek legal advice: A lawyer can help negotiate with the bank, analyze unfair clauses, or even propose a less burdensome payment plan.

Negotiate solutions with the creditor: Credit restructuring, phased payment plans, or replacement of the guarantee with another form of security.

What is a guarantor?

A guarantor is someone who agrees to pay a debt if the debtor fails to pay. This person is making a commitment to a creditor or financial institution.

Essential rights of the guarantor when the debtor fails to pay.

In situations where you are a guarantor and the debtor does not pay, there are rights you have that you should consider in such scenarios:

• Benefit of prior executionThe guarantor has the right to demand that the creditor first execute against the assets of the principal debtor before resorting to their own assets. However, this right can be waived contractually, which is common in banking contracts. 
• Benefit of the deadline: Allows the guarantor to benefit from the deadlines granted to the principal debtor. If the debtor misses the deadline, the guarantor will also lose this benefit. 
• SubrogationAfter paying the debt, the guarantor has the right to demand reimbursement of the amount paid from the principal debtor.

What are the consequences of non-payment?

If you are a guarantor and the debtor fails to pay their debts, there is a possibility that the guarantor may be called upon to cover those debts. 

If the guarantor also fails to pay the debt, legal proceedings may be initiated. seizures of goods and income. 

PERSI for guarantors: how to apply and what to expect?

O PERSI (Extrajudicial Procedure for Regularizing Default Situations) It is a form of negotiation between the guarantor and the financial institution, with the aim of settling the debt. 

The guarantor has a period of 10 days after being contacted to make the payment to request their inclusion in this procedure. 

Strategies for dealing with a guarantor in default.

If you are a guarantor and the debtor fails to pay what is owed, you can adopt some strategies to ensure the debt is paid:

• Negotiate with the creditor: Try to agree on a payment plan or debt restructuring.
• Request PERSI: Participate in the procedure to explore out-of-court solutions.
• Consult a SolicitorObtain legal advice to better understand your rights and available options.

No Lawyers in Braga We have qualified professionals available to provide all the support you need, from advice to the legal protection you require.

What exactly is the benefit of prior execution for the guarantor?

A prior excursion This is a benefit if you are a guarantor and the debtor fails to pay. This benefit ensures that the assets of the principal debtor are seized first, without needing to resort to the guarantor's money. 

Does the benefit of the extended payment period apply to the guarantor if the debtor misses the deadline?

Yes. If the principal debtor misses the benefit deadline, the guarantor will then have to make the payment. 

Can the bank seize my assets before foreclosing on the debtor?

The principal debtor is normally the first person against whom the bank seizes assets. However, if the guarantor refuses prior execution, the bank can go directly to the assets. 

I was notified: how long do I have to apply for PERSI as a guarantor?

As a guarantor, you have 10 days to request PERSI. 

What happens if the debtor is insolvent? What changes for the guarantor?

If the principal debtor is declared insolvent, the guarantor remains responsible for paying the debt. They have the option of resorting to PERSI (Special Regime for the Settlement of Debts) or other forms of negotiation. 

I am a guarantor, can I stop being one?

In principle, it is not possible to cease being a guarantor while the contract is in effect. To be released from the guarantee, the creditor must agree to replace the guarantee with another security or the contract must be renegotiated.

Can I stop being a guarantor halfway through the contract?

Yes, it's possible. However, it requires an agreement between the guarantor and the creditor, such as changes to the contract or replacing the guarantee with other forms of security. 

Conclusion 

A guarantor is a person who takes responsibility for paying a debt to a creditor if the principal debtor fails to do so. 

However, there are mechanisms that protect guarantors, such as PERSI or prior execution. There is also the possibility of ceasing to be a guarantor, but under certain conditions such as amending the contract.