I’f she is only legal heir no harm in becoming g guarantor
What is the risk of becoming guarantor
My cousin sister dad decreased last year. Uncle had no nominee for his saving account rs 2 lacs and he also had some loan which EMI rs 3000 is getting deducted every month. My cousin sister, only elder in the family, wants me to become guarantor so she can withdraw that money from saving account. She has successor certificate but still bank needs two guarantor who has FD or any kind of assets worth rupees 5 lacs. She says bank need guarantor, because in future nobody should claim on that money rather than her. My question is, what is risk for me in case I become guarantor? I know she is only successor and no one else will claim. But my worry is about loan. Will that loan provider have any legal actions on me?
Asked 2 years ago in Civil Law
29 Answers
- Since the bank is refunding amount of her father then as per rule there should be two witnesses and not guarantor.
- However, if you are sure that there is none legal heirs except her i.e. her mother etc., then you can be a witness for the said refunding of the amount.
- However if you take guarantee for the payment of said emi , then you will be equally liable for the payment of the loan amount .
The liability of borrower and guarantor is joint and several. In case of default bank can recover it from borrower or guarantor.
In case she fails to clear the loan, you will be held responsible for payment of loan and loan amount will be deducted from your fd account. That is the only risk you have.
1. You shall have to carefully scrutinise the guarantee agreement and see what you are going to guarantee for.
2. If it is to guarantee that you shall pay the amount in case there is any other legal legal of your Uncle found later on claiming share of the said Rs.2 lakhs, then you can become the guarantor.
3. However, I fail to understand that when the savings account of the Bank in question is of Rs.2 lakhs, then why the Bank is asking for guarantor having FD of Rs.5 lakhs?
If the person doesn't repay guarantor needs to pay the loan
does it also mean? If uncle was guarantor to someone, and if that person defaults. Even that would be passed on my cousin sister and then me?
Asked 2 years ago
A guarantor is fully liable for any liabilities incurred on behalf of the person who takes loan. Therefore be prepared and act accordingly.
If you are one of the several guarantors then you ate also liable along with others if she is unable/unwilling to pay the loan.
If she's found to have claimed the amount fraudulently or if someone has filed a lawsuit against her and she is not cooperating or declared herself bankrupt, then the guarantor would be liable to pay the amount due from her.
No, that will not pass on to your cousin if she has not inherited any assets from him.
To the extent she inherit any assets from her father and in case there is any recovery from her, she can claim it from the original borrower by filing suit against borrower.
Yes it will be passed first to you uncle. If he is not alive then to his legal heirs if they enjoy his property
If uncle was guarantor and person defaults legal heirs ie cousin sister would be liable for repayment of loan
Liability of uncle is his personal liability, it cannot be passed of his legal heirs.
Dear Sir/Ma'am,
1. A contract of guarantee means a contract to perform the promise or discharge liability of the third person in case of his default.
2. When a guarantor dies, the deceased guarantor’s liability to the creditor is limited only to the extent of transactions taken place during the guarantor’s lifetime. The legal heirs/representatives are liable to assume the promise executed by the deceased under the guarantee, but they are not liable for future liabilities of the principal debtor after his death unless such liability on legal heirs is expressly mentioned in the guarantee contract.
3. Hence you are not liable for the deceased guarantor's default.
Thank You.
I just saw a document that bank needs signs on. It is actually Guarantor profile for loan. First para mentions "I would repay forthwith pay entire loan outstanding, together with interest and additional charges." I spoke with bank manager he said, it's only format they have. He asked me I can cut this para and give declaration stating, " if any other person claim said Rs.2 lakhs, then I Will be responsible. I will not be responsible for any other loan account" Does it make sense?
Asked 2 years ago
A guarantor is bound to pay the loan in the person taking the loan/debtor defaults. Those are the rules set hy the RBI.
if there is a person who holds a valid succession certificate then the funds can be released to that person and thus there is no question of the bank requiring any guarantor for the same
which is this bank? who advises this bank? are chickens advising the bank!!
One more twist, I forgot to explain. My uncle had two wives, First one died long back and my cousin's sister is from her. Then uncle married again. Finally, due to some dispute, she left my uncle. After a year uncle died. The second wife has no child from my uncle. Marriage was done in temple and has no marriage certificate but she has aadhar and divorce happened over the agreement and written on bond paper. But there are chances she may claim funds. Now, who is the legal heir, who should get that deposit amount from my uncle, which has no nominee? Is it advisable that the girl now gets a legal heir certificate and get that deposit amount?
Asked 2 years ago
If your liability is limited of 2L and you have faith in the capacity and intention of principal borrower (cousin) you can furnish your guarantee.
You are only liable to repay Rs 2 lakhs only in case any claims are made by any legal heirs
Second wife is also legal heir
agreement dissolving marriage has no value
it has to be dissolved by court orders
The marriage still subsists as a divorce cannot be done on a paper. Judicial proceedings followed by a decree is essential.
She is an heir along with any children of your uncle.
Dear sir,
The guarantor is bound to pay only the debts of the debtor. If your liability is restricted only up to 2 lakhs hence you can furnish a guarantee. The second wife is also a legal heir.
Thank you
You can delete the undesirable undertaking in the guarantor form provided the bank manager agrees to delete the same with the bank's seal and his signature on it after deleting the said condition.
Your uncle's second marriage was not legally dissolved by a decree of divorce through a court of law hence his second wife remains his legally wedded wife and now a widow to her deceased husband, hence she will also become one of the legal heirs to your deceased uncle besides his children born to him through his first marriage.
In the legal heir ship certificate your deceased uncle's second wife shall also be mentioned as one of the legal heirs or successors in interest to succeed to his assets.
If she is a legal heir then she can claim
1. The liabilities of the Guarantor will be passed on to his/her legal heirs, after his/her demise, to the extent of the value of the property they have severally or jointly they have inherited.
2. If the deceased Guarantor's liability is for Rs. 1 Core and his/her legal heirs have jointly or severally inherited his/her properties worth Rs.50 lakhs, the the said legal heirs will be liable to settle the liability of rs.50 lakhs only.
3. The legal heirs will not be liable to discharge the liability of the deceased Guarantor from their own fund.
1. You have mentioned in your query that your deceased Uncle has already stood as guarantor for the loan of a third party.
2. If he has stood as guarantor for the entire loan amount then he will be liable to pay the total outstanding amount of the Borrower.
3. If he has mentioned about a specific amount for which he is standing as the Guarantor, then he will be responsible to replay the said amount specified amount only not any other amount.
1. If it is established that your Uncle has legally married the second lady, then she will heva equal share of your deceased Uncle's properties.
2. In case of moveable properties (like amount in the Bank account), Succession Certificate shall have to be submitted and not legal heir certificate which is required for claiming immoveable properties of deceased owner.
- Yes, there is chances that the second wife may approach the bank for claiming the amount
- Even she will arrange Legal heir certificate , then also bank may require a guarantor for its safety .