Alphashark
Registered User
- Messages
- 9
. As its just a guarantee to pay if the mortgagee defaults, it's not a debt until that happens. Therefore, does it reckon in a bankrupcy?
I think whats interesting though is the case where A has signed a PG in respect of the debts of B. A goes bankrupt in the UK and is discharged from his debts in one year.One week after A is discharged from Bankruptcy, B defaults on his debts and the bank makes a demand on A. So once again A is in trouble and may need to go bankrupt all over again
The guarantee is a contingent liability for the individual who will be adjudged a bankrupt, bankrupcy deals only with actual liabilities not contingent liabilities, until the principal debtor defaults there is no direct liability of the guarantor so their guarantee stands.
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