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If I am the guarantor for someone else's loan, can my personal property be possessed if the other person doesn't pay back the loan? Also, can my property be mortgaged as a guarantee to his loan?

  • Where are you located? – quid Sep 20 '16 at 16:43
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Being a guarantor means you have explicitly agreed that you will make the loan payments if the primary borrower doesn't. That means you have given them permission to demand those payments, which means they can force you to sell things if you can't find the money any other way.

Essentially, you have promised to buy the loan from the bank if they decide it's a bad loan. Where you would find the money to pay for it is your problem.

Obviously, this is not a situation you want to get into if you don't trust that the borrower will do everything in their power to protect you or repay you, or if you aren't willing to make them a gift of the money if they can't or don't, or if you can't afford to lend them the money yourself.

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If I am the guarantor for someone else's loan, can my personal property be possessed if the other person doesn't pay back the loan?

As you have not indicated jurisdiction / country ... laws vary. In general;

Yes. Your personal property can be possessed. However the financial institution has to send notices, get a court order and then possess your property and auction it. They can also freeze your Bank Account, or any other assets you have. There is no restriction as you have given a blanket guarantee.

Note depending on Jurisdictions your estate and or legal heirs can also be liable to this if you die during the course of loan.

can my property be mortgaged as a guarantee to his loan?

Depending on how this is worded in legal contract, you can mortgage your property ONLY as a guarantee to his loan. In such cases financial institution can only take your property, but cannot take any other assets such as Bank deposits etc.

  • Legal heirs cannot, in general, be liable for a decedent's debts. The decedent's estate is, and debts can decrease or eliminate what the heirs receive. But if there isn't enough money in the estate to pay the debts, the heirs are not responsible for making up the shortfall. – Pete Becker Sep 20 '16 at 12:44
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    @PeteBecker: The question of inheriting debts was recently addressed on Law.SE. What you say is accurate in common law jurisdictions, but apparently not in civil law jurisdictions (e.g. most of continental Europe). – Nate Eldredge Sep 20 '16 at 13:09
  • @NateEldredge - thanks, that's interesting. One key point, though: "the system usually allows a[n] heir to disclaim [an inheritance]", and as a consequence, not be responsible for debts that exceed assets. – Pete Becker Sep 20 '16 at 13:17

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