The guarantee is personal security par excellence. It aims to add alongside the main debtor of the credit a third person (guarantee) who undertakes, under certain conditions, to intervene on behalf of the debtor in the event of difficulties in repaying the credit. A few words of explanation.
Notion
To act as guarantor for someone means to undertake to pay for them if they do not pay their debt themselves. The guarantor is a natural or legal person (such as a financial institution) who contractually undertakes vis-à-vis a creditor to pay if the debtor defaults on the due date.
Any person can act as guarantor if they are recognized as capable and of course solvent.
The guarantor must be aware that he is committing his own assets to repay a debt contracted by a third party (the debtor), if this third party does not respect his commitment.
Types of surety
A distinction is made between simple and joint guarantees:
- In the simple guarantee, the creditor must first sue the principal debtor and in the event of multiple guarantors, the debt will be distributed in proportion to the guarantors;
- In joint and several guarantees, the creditor can immediately sue the guarantor(s) for the entire debt.
In practice, the creditor has every interest in providing his debtor with a joint and indivisible guarantee.
The guarantee of a consumer credit
Guarantee information
The lender must inform the guarantor:
- of the amount that is guaranteed: the security is only worth this amount plus late payment interest. To this end, a copy of the credit contract must be given in advance and free of charge by the lender to the guarantor;
- When the borrower is late in paying two installments or at least one fifth of the total amount to be repaid;
- Payment facilities granted to the consumer.
Conditions for acting against the surety
The borrower must be in default of payment by at least two installments. In this case, the credit contract will be terminated and the borrower registered with the National Bank of Belgium.
Amount and duration of the deposit
In a credit contract concluded for an indefinite period, the guarantee:
- cannot cover a period that exceeds 5 years;
- can only be renewed at the end of the period with the express agreement of the guarantor.
Free security
Free security covers the situation of a person who commits himself to the principal debtor without obtaining the slightest financial benefit.
Since December 1, 2007, the free deposit is only valid subject to compliance with certain legal conditions:
- A contract separate from the initial credit contract;
- The duration must be indicated in the guarantee document;
- The guaranteed amount must be mentioned;
- The contract must include written statements in the hand of the guarantor: ” by providing security for…within the limit of the sum of…(in figures) covering the payment of principal and interest for a period of…I undertake to repay the creditor of…the are owed on my property and on my income if, to the extent that…does not satisfy them himself”;
- The guarantor’s commitment must be proportional to his ability to repay;
- The obligations of the heirs are limited to their respective share in the inheritance;
- The creditor must inform the surety about the performance of the main obligation. He must do this at least once a year in case of regular execution;
