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Who Acts As A Guarantor In A Business Loan? A Detailed Legal Advice Before You Become a Loan Guarantor!
Viewed by 14,538 Smart Towkays
Joint And Several Guarantee
We wish too! But sadly, borrower and guarantors are responsible to repay 100% of the loan amount.
In the event of default, Participating Financial Institutions are obligated to follow their standard commercial recovery procedure, including the effect of the personal guarantee (which means PFIs will foreclose, auction off any valuable assets of the company and guarantors), before they make a claim against Enterprise Singapore for the unrecovered amount in proportion to risk-share.
In Singapore if a sole guarantor dies, family members are generally not legally responsible for the debts left behind by the deceased. According to section 57 of the Probate and Adminstrator Act, if the deceased's estate is solvent, which means that his assets are more than his liabilities, the executor may use his estate to settle his/her debts.
If the estate is deemed insolvent, the debts will have to be written off.
But if there are more than one guarantor e.g. 2 directors coming in as Personal Guarantor for the unsecured business term loan, in this case the surviving guarantor will assume and continue the repayment of the debt
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