A suretyship is created by a contract. If you are a surety, you have made an express promise to be responsible for a debtor's debts. Creditors can directly collect from the surety. For example, a bank might only give you a loan if your father co-signs it. By doing so, your father becomes a surety to your loan and the bank can seek payment directly from your father.
As a surety, you have rights beyond that of the debtor. Such rights include:
Even though you are contractually obligated to pay the debt along with the debtor, there are instances where you can be released from the debt (or parts of it). This requires you to have a legally recognized defense. Such defenses include:
Surety agreements are quite common in creditor-debtor transactions. However, the rights and defenses of a surety can be complex and confusing. For example, a guarantor is like a surety but they have completely different obligations. Consult an experienced attorney to learn more about your surety agreement or to seek advice about whether to become a surety.
Last Modified: 06-05-2014 12:34 PM PDTLaw Library Disclaimer
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