In short
If the creditor reached you as a surety, first read in which capacity you were written on the document you signed: surety, joint and several surety, or aval. Not every signature is the same suretyship. The kind of the proceeding sits on the enforcement with and without a judgment page.
If the principal debtor stopped paying and the creditor reached you in the capacity of surety, first find the whole of the document you signed. Record the date of service of the order for payment or of the notice. Check in which capacity you were written: surety, joint and several surety, joint debtor, or giver of an aval. These concepts are not the same, and they change when, and for which amount, the creditor can apply to you.
Standing surety does not, in every situation, mean taking on the whole debt of the principal debtor without condition. The liability can be limited by the kind of the suretyship, the maximum amount, the conditions of form, the maturity, the validity of the principal debt, and the transactions the creditor made. Together with that, saying "I did not use the money" does not, on its own, remove a valid suretyship. This note is for general information. A result particular to a person cannot be drawn before the signed document and the enforcement file are examined.
First determine in which capacity you signed
On loan or debt documents, in everyday language everyone can describe themselves as "a surety". Different legal capacities can be found on the document:
- Ordinary surety: in certain conditions the creditor may have to apply first to the principal debtor.
- Joint and several surety: when the statutory conditions are formed, the creditor can turn to the surety more directly.
- Joint debtor: liability can come onto the agenda as one of the principal parties of the debt.
- Giver of an aval: the negotiable-instrument security on a cheque, a promissory note, or a bill of exchange is subject to rules different from suretyship.
- A person who gives a guarantee: whether the contract is in the nature of an independent guarantee is interpreted separately.
The word written in the heading of the document may not be determinative on its own. The section where the signature is, the declaration of will, the maximum amount, the date, and the economic purpose of the contract are read together. The real legal character of mixed expressions in the form "joint debtor and joint and several surety" is determined according to the concrete text.
Why the conditions of form of suretyship matter
Because suretyship holds a person liable for another person's debt, the statute provides strict conditions of form. The written form, the maximum amount of the liability, the date of the suretyship, and the will for a joint and several suretyship are the basic points of this examination. There are situations in which the statute looks for some information to be stated in the surety's own handwriting.
In the first check of the document these questions should be asked:
- On which page of the document is the surety's signature?
- Is the maximum amount for which they are liable clear?
- Is the date of the suretyship written?
- If there is joint and several liability, is the will shown in the statutory form?
- Is there a field on the contract that was filled in or changed later?
- Is the surety's signature on the additional protocols?
A gap of form can affect the validity of the suretyship. It can be advanced that the same signature was put in the capacity of an aval, of a guarantee, or of the principal debtor. For this reason the examination should be made with the signed original contract and its annexes, not only with a photocopy or with the summary text in a mobile application.
The spouse's consent and the exceptions
In the suretyship of a married person, the consent the spouse gave beforehand, or at the latest at the moment of the transaction, can be looked for in certain conditions. Some transactions connected with a commercial enterprise, with company partnership, and with professional activity can be subject to statutory exceptions. The date of the transaction, the surety's marital status, and the purpose of the debt are important for this reason.
The absence of the spouse's consent does not automatically invalidate every personal security. An aval on a negotiable instrument and suretyship are not subject to the same regime. Ignoring the proceeding by relying only on the spouse's signature, before the legal character of the document is classified correctly, is risky.
The difference between ordinary and joint and several suretyship
In an ordinary suretyship the surety's secondary liability is more marked. As a rule, conditions such as the creditor first turning to the principal debtor, and collection not being achieved, can come onto the agenda. If there is a pledge, a discussion of applying to the pledge first can also arise. Statutory exceptions, and the debtor's inability to pay, can change the result.
In a joint and several suretyship the creditor can apply to the surety when conditions such as the principal debtor's default and the notice remaining without result, or a clear inability to pay, are formed. Still, the word "joint and several" does not mean unlimited liability. The maximum amount, the maturity, the validity of the suretyship, and the defences about the principal debt are kept.
This separation matters for the answer to be given to the order for payment. The notifications the creditor made to the principal debtor, the date of default, the existing pledges, and the order of the proceeding should be taken from the file.
The first steps when a proceeding or a request for payment arrives
If a notice, an order for payment, or a petition of an action came to you as surety, one can move in this order:
- Record the date of service and the manner of delivery.
- Obtain the signed suretyship contract and all the annexes.
- Draw out the current account of the principal debt, the payments that were made, and the restructurings.
- Check the kind of the suretyship, the maximum amount, and the conditions of validity.
- Examine the transactions the creditor made against the principal debtor and against the securities.
- Determine, within the period, the objection that fits the kind of the proceeding, or a payment plan.
The proceeding can be without a judgment, with a judgment, or particular to a negotiable instrument. The period of the application and the authority change according to this classification. Using a general petition of objection before the difference between enforcement with and without a judgment is understood is not correct.
The defences the surety can advance
The surety is not confined to the information "the principal debtor did not pay". According to the concrete event these headings can be examined:
- The suretyship not fitting the conditions of form
- The amount that is asked for passing the maximum amount of the suretyship
- The principal debt never arising, ending, or being paid in part
- A discussion of limitation, or of the period of the suretyship
- The creditor reducing the existing securities to the surety's damage
- The risk being made heavier without the surety's consent
- In an ordinary suretyship, the need to apply first to the principal debtor or to the pledge
- An irregular service, venue, or an error of calculation
Some of these defences are advanced at the stage of objection to the order for payment. Some are advanced on the path of an action or of a complaint. A single sentence in the form "I am a surety, but I am not the debtor" may not show which legal reason is relied on. If an objection to an enforcement proceeding is to be made, the scope and the evidence should be built clearly.
Defences belonging to the principal debtor
The surety can benefit from some defences belonging to the principal debtor, such as the invalidity or the ending of the principal debt. For example, the debt having been paid, the calculated interest being contrary to the contract, or the goods never having been delivered can also affect the surety's liability. The effect on the surety of defences that depend only on the principal debtor's personal situation can be different.
If communication with the principal debtor can be established, all the payment slips, the restructurings, and the creditor's correspondence should be asked for. If the debtor does not give information, an independent check should be made through the records of the bank and of the enforcement file.
Restructuring and changes of the contract
Extending the maturity of the loan, changing the interest rate, advancing a new loan, or transferring the debt to another account can change the risk of the suretyship. Which changes the surety consented to, and to what extent they took on liability for future debts in the first contract, should be examined.
Not every new payment plan ends the old debt and gives rise to a new debt. Against that, some renewal transactions can affect the scope of the suretyship. These documents should be put in date order:
- The first loan or debt contract
- The declaration of suretyship
- The protocols of extension of maturity and of restructuring
- The notice calling in the account, and the notices of default
- The partial payments the principal debtor made
- Changes of the pledge or of the mortgage
The effect on the liability of additional protocols that do not have the surety's signature is assessed separately. It should not be assumed that a general record in the contract of "I accept all the changes" covers every increase of risk without limit.
If a decision to pay is given, how is it made safely?
If the suretyship is valid and the debt is within the scope, payment can come onto the agenda. Before the payment, the current account of the file should be taken, and the collections the principal debtor and the other sureties made should be deducted. The same debt being collected more than once from more than one person should be prevented.
This information should be on the payment document:
- For which enforcement file or contract it was paid
- The separation of principal, interest, and cost
- That the payment was made in the capacity of surety
- If it is a partial payment, what the remaining balance is
- The creditor's obligation to transfer the securities and the documents
If a settlement is to be made with the creditor, it should be written clearly whether the amount the surety paid closed the whole debt, or only their own liability. Rather than a spoken statement "we will take you out of the file", a waiver or a notice of collection to be presented on the file should be seen.
Recourse to the principal debtor after payment
The surety can be subrogated to the creditor's rights against the principal debtor to the extent they paid the debt. In everyday language this is the right to ask back from the principal debtor the amount you paid. The existence of the right of recourse does not mean collection will be easy. The debtor's assets, and other proceedings, matter.
These records should be kept for the recourse file:
- The suretyship contract and the document of the principal debt
- The payment slips and the enforcement receipts of collection
- The creditor's writing that shows how much of the debt closed
- The documents of the pledge, the mortgage, and the other securities
- The notice of payment sent to the principal debtor
- The identity and liability information of the other sureties
The transfer or the keeping of the securities in the creditor's hands to the surety has value for the possibility of recourse. If the creditor removed the security to the surety's damage, its effect on the liability can be examined separately.
More than one surety and the internal relation
If there is more than one surety on one debt, liability against the creditor and the sharing among the sureties themselves are not the same. Each surety's maximum amount, the date of the signature, and the kind of the suretyship can differ. After a payment one surety made, a possibility of recourse to the other sureties can arise.
Equal division should not be applied like an automatic rule. One of the sureties signing only for a particular tranche of the loan, another taking on joint and several liability, or giving a different security, changes the sharing. For this reason an internal calculation should not be made before all the suretyship documents are seen.
Where the suretyship file is read from
An order for payment can come to a surety living in Ankara from an enforcement office in another city. The venue of the proceeding is determined according to the contract, the place of performance of the debt, and the character of the parties. The file number on the document should be checked through UYAP. If a physical application is needed, the current address of the office should be confirmed.
In commercial and individual loan relations in Ankara too, the rules of suretyship rest on national legislation. Local density of work can affect the calendar of the file. It does not extend the period of objection. Reaching the original of the contract without delaying the service is important, especially when a document has to be asked for from the bank archive.
A final assessment
If the principal debtor does not pay, the surety's safest conduct is neither accepting the liability in advance nor treating the document as entirely absent. First the capacity of the signature, the conditions of form, the kind of the suretyship, the maximum amount, and the current state of the principal debt should be examined. If the proceeding has started, the check of the service and of the period is conducted together with this examination.
A right of recourse to the principal debtor, and, if the conditions exist, to the other sureties, can arise for the surety who pays the debt. For this reason the payment and security documents should be kept. Which kind of path the creditor takes to the surety sits on the enforcement against a surety page. A claim that one is not the debtor can be assessed separately within the frame of a negative declaratory action. This note offers general information. The real character of the contract, and the current legislation, should be examined together in the concrete event.
This note reads the suretyship document, the capacity of the signature, and the record of the principal debt side by side. This note does not add to this text a rate that is not written on the file. A lawyer in Ankara separates, from the record, that the office being in Çankaya does not choose the competent enforcement office. This note does not put suretyship in place of an aval. The frame sits on the enforcement and bankruptcy law page.
Conclusion
This note is for general information. The document, the period, and the procedure of the concrete event should be read separately. There is no promise of a result by rote.