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Suretyship and Guaranty Parties

Suretyship and Guaranty Parties.

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Suretyship and Guaranty Parties

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  1. Suretyship and Guaranty Parties In a suretyship or guaranty arrangement, a third party promises to be responsible for a debtor’s obligations. A third party who agrees to be primarily liable for the debt (that is, liable even if the principal debtor does not default) is known as a surety; a third party who agrees to be secondarily liable for the debt (that is, liable only if the principal debtor defaults) is known as a guarantor. As noted in Chapter 12, normally a promise of guaranty (a collateral, or secondary, promise) must be in writing to be enforceable. Principal Debtor Creditor Guarantor (Secondary Liability to Creditor)Surety (Primary Liability to Creditor) Chapter 23

  2. Creditors’ Rights and Bankruptcy Chapter 23

  3. Creditors’ Rights and Bankruptcy (Continued) Chapter 23

  4. Creditors’ Rights and Bankruptcy (Continued) Chapter 23

  5. Creditors’ Rights and Bankruptcy (Continued) Chapter 23

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