Once the guarantor's debt cannot be repaid, the guarantor shall bear joint and several liability to repay the debt for the guarantor. Someone who makes a commitment to something. Another example is the guarantee of debt. Guarantor refers to a legal person, other organization or individual who has the ability to pay off bill debts on his behalf. The debtor of a non-negotiable instrument makes a guarantee to the drawer, endorser and acceptor.
The guarantor and the guaranteed bear the same responsibility. Branches and functional departments of state organs, institutions, social organizations and enterprise legal persons shall not act as guarantors, except as otherwise provided by law.
All loans are collected by third parties, some are corporate loans, some are private loans, and third-party loans are only used as funds, which have nothing to do with the loans themselves and will not affect the third-party recipients.
This is stipulated in the three measures and one guideline of the CBRC. The technical term is entrusted payment, which means that you borrow money and transfer the loan to your counterparty according to the purpose of your loan application. For example, if you apply for a loan to buy steel, you must submit a purchase contract when you apply for the loan, and then the loan will be directly transferred to the steel supplier. The third party does not bear any legal responsibility.
Article 6 of the Guarantee Law of People's Republic of China (PRC): The term "guarantee" as mentioned in this Law refers to the act that the guarantor and the creditor agree that when the debtor fails to perform the debt, the guarantor will perform the debt or assume the responsibility according to the agreement.
Accordingly, no matter what form of guarantee, once the debtor of the guarantor fails to repay the debt, the guarantor will bear the risk of repaying the debt for the guarantor.
Article 21 of the Guarantee Law of People's Republic of China (PRC): The scope of guarantee includes the principal creditor's rights and interest, liquidated damages, damages and expenses for realizing creditor's rights. If there are other provisions in the guarantee contract, such provisions shall prevail.
The guarantor shall bear the responsibility of guarantee within the scope of guarantee. Where the parties have not agreed on the scope of guarantee or the agreement is unclear, the guarantor shall be liable for all debts.