Attorney at law Ilze Jankeviča consults a newspaper regarding guarantor’s liability
Attorney at law Ilze Jankeviča of LEADELL Fogels, Vītols & Paipa consulted the newspaper Ievas Padomu avīze in preparation of the magazine’s article “Guarantor – hostage of a debt?”, as well as expresses her point of view regarding the guarantor’s liability when a guarantee agreement is concluded.
Quote from the article – point of view of the attorney at law Ilze Jankeviča:
“(..) by concluding a guarantee agreement the guarantor takes the responsibility for the debt repayment of a third party. Thereby, concluding a guarantee agreement should be given just as serious attention as concluding, for example, a loan agreement. Before concluding a guarantee agreement several aspects should be assessed – the person, for whose obligations one guarantees (the person’s property status, subjective attitude towards the fulfillment of the obligations in general and other factors), as well as the guarantor should consider its own capability to repay the debt, if necessary. The guarantor should also take it into account that, by concluding the agreement, he usually does not obtain any financial benefits – neither the rights to the loan, nor movable or immovable property. On the contrary – the debt may have to be repaid with the belongings of the guarantor. The guarantor from the liability is released very rarely. Therefore, if the contractor does not have any specific knowledge about the risks associated with the guarantee, it is advisable, before signing the agreement, to consult a qualified attorney about the content of the agreement (..)”