[Direct answer]In the Beijing area, the scope of responsibility of a guarantor for private lending is determined by three factors: the guarantee method, the scope of guarantee, and the guarantee period. Regarding the guarantee method, according to Article 686 of the Civil Code of the People's Republic of China (effective January 1, 2021), the guarantee includes general guarantee and joint and several liability guarantee. Under general guarantee, the guarantor only assumes guarantee responsibility within the scope of guarantee when the debtor is still unable to perform the debt after litigation or arbitration procedures, and the creditor cannot directly demand that the guarantor repay the debt. Under joint and several liability guarantee, the creditor can directly demand that the guarantor assume responsibility. The scope of guarantee can be agreed upon, including the principal debt, interest, penalty, and expenses for realizing the creditor's rights, but if the agreement is unclear, it shall be presumed to cover the principal debt. The expiration of the guarantee period will result in the exemption of guarantee responsibility, which is the most important protection for the guarantor. Therefore, when signing the contract, the guarantee method, scope of guarantee, and guarantee period should be specified item by item. For the key points of contract review, please refer to the following content:Business and contract disputes in enterprisesColumn. You can refer to it for reference.Creditor's rights and debts, and enforcementThe service description in the column.

1. Problem background and typical scenarios

Most people who consult this issue are either parties who are required to repay the debt on behalf of the guarantor, or lenders who assert their rights. There are three common scenarios: friends who borrow money verbally promise to act as guarantors, but are later required to bear full responsibility; guarantee contracts that do not specify the guarantee method are signed, and the guarantor is subsequently required to repay the debt directly; and lenders who repay the debt on behalf of the borrower and then seek to recover the repaid amount from the borrower. In practice, the most common disputes involve the determination of the guarantee method and the scope of the guarantee. Guarantors often believe that they are just helping as intermediaries, but in fact, under the joint and several liability guarantee, their legal status is closer to that of a debtor, and they can be directly required to repay the debt. Another common misunderstanding is that signing a contract equals joint and several liability, but in the absence of an agreement, it is usually presumed to be a general guarantee.

II. Key points of dispute

Focus One: Ensure that the contract is in written form and contains the necessary content. Focus Two: Ensure the agreement on the mode of guarantee and the presumption thereof. Focus Three: Determine the scope of the principal debt and the upper limit for calculating interest and penalties. Focus Four: Define the length of the guarantee period and the method of calculating its commencement date. Focus Five: Verify whether the rights have been legally asserted during the guarantee period. Focus Six: Address the handling of guarantee obligations when the principal debt is invalid or beyond the statute of limitations. Focus Seven: Determine the scope of recourse and the costs of realizing the creditor's rights after the guarantor has made repayment on behalf of the debtor. Focus Eight: Define the responsibility sharing among multiple guarantors. For reference on recourse and realization paths, please refer to the relevant provisions.Special services and other casesThe instructions in the column.

III. Professional analysis by Henglue Lawyers

Take a civil loan dispute handled by lawyers from our firm as an example: The lender and the borrower were friends. On November 3, 2024, the two parties signed a written loan agreement, which clearly stipulated the principal amount, repayment period, and voluntary assumption of losses such as litigation fees, attorney's fees, transportation fees, and preservation guarantee fees after default. After the due date, the borrower stated that he was unable to repay the loan. The attorney handling the case adopted a strategy of first mediation and then litigation, and set clear breach of contract clauses in the mediation agreement: repay part of the loan in two installments, and if there is a breach of contract in either installment, the borrower shall pay the full amount and fees according to the original agreement. The court issued a civil mediation agreement to confirm this. This case provides direct guidance on the handling of guarantee liability: stipulating the fees for realizing the creditor's rights in the agreement actually fixes the potentially disputed parts of the guarantee scope in advance. Therefore, when signing the agreement, the guarantor should pay special attention to whether the provisions on such fees are clear and reasonable. For this reason, the review of the guarantee clauses needs to be carried out in conjunction with the overall arrangement of the loan. This case was handled by Beijing Henglu Law Firm.Tian JiayanThe attorney (practice license number: 11101202111381309, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action suggestions: 1. Check whether the guarantee contract is in written form and clearly specifies the guarantor, the debt being guaranteed, the guarantee method, and the guarantee period. 2. If no guarantee method is specified, handle it as a general guarantee. The lender cannot directly demand repayment from the guarantor and should explicitly assert their rights. 3. Verify whether the scope of the guarantee and the provisions on interest and penalties comply with legal caps. 4. Check the length of the guarantee period and whether rights were asserted within that period. 5. Notify the guarantor in writing promptly when the principal debt changes. 6. After the guarantor repays the debt on behalf of the debtor, they may recover the repayment from the debtor according to law, including reasonable costs incurred in enforcing the claim. 7. When multiple guarantors exist, clarify their respective liability shares. Legal basis: Articles 681, 682, and 686 of the Civil Code of the People's Republic of China (all effective from January 1, 2021); Interpretation of the Supreme People's Court on the Application of the Guarantee System of the Civil Code of the People's Republic of China (based on the current effective version); Specific provisions shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Reminder

Firstly, the guarantee method must be specified in the contract. If no such specification is made, the guarantee shall be handled in accordance with the general guarantee, which is unfavorable to the creditor. Secondly, the expiration of the guarantee period will result in the exemption of the guarantee liability, which is the most important protection clause that needs attention. Thirdly, if the scope of the guarantee is not specified, it shall be presumed to cover only the principal debt, and the interest and penalties shall be specified separately. Fourthly, when the principal debt is increased or modified, the guarantor shall be notified in writing, otherwise it may not take effect against the guarantor. Fifthly, the guarantor shall not claim the right of defense of the principal debt, which is an important rule of the guarantee system. Sixthly, after the guarantor makes payment on behalf of the debtor, the guarantor may recover the payment from the debtor. Seventhly, before signing the guarantee documents, the guarantor shall fully assess the debtor's repayment ability and its own risk exposure.

VI. Frequently Asked Questions

Q1: What responsibilities do guarantors of private lending have to bear?

It depends on the type of guarantee. Under a general guarantee, the guarantor is only liable for the part of the debtor's obligations that cannot be satisfied through litigation or arbitration, and the creditor cannot directly demand repayment from the guarantor. Under a joint and several liability guarantee, the creditor can directly demand that the guarantor assume responsibility. The scope of the guarantee generally includes the principal debt and the agreed interest, the penalty for breach of contract, and the expenses incurred in enforcing the creditor's rights. After the guarantor repays the debt on behalf of the debtor, the guarantor may recover the repaid amount from the debtor.

Q2: What is the difference between a general guarantee and a joint and several liability guarantee?

The core difference lies in whether the creditor can directly require the guarantor to assume the liability for repayment. A general guarantee is supplementary. The creditor must first claim against the debtor through litigation or arbitration procedures. If the debtor is still unable to repay, the guarantor will assume the guarantee liability within the scope of his guarantee; a joint and several liability guarantee grants the creditor the right to claim directly against either party. The two also differ in the application of the defenses of prior performance and prior suit, which must be clearly stated at the time of signing.

Q3: If the guarantee method is not specified, how will it be calculated?

When the parties have not agreed on the guarantee method or the agreement is unclear, it shall be presumed to be a general guarantee according to the current rules. This means that the creditor cannot bypass the debtor and directly demand repayment from the guarantor. Instead, they need to first file a lawsuit or arbitration against the debtor to claim repayment. Therefore, for lenders, it is unfavorable not to explicitly stipulate the guarantee method; for guarantors, it is relatively advantageous. When signing the contract, parties should fully understand this rule and clearly state the chosen guarantee method.

Q4: What will happen if the guarantee period has passed?

Upon the expiration of the guarantee period, the guarantor's liability is exempted, and the creditor can no longer require the guarantor to assume responsibility. It should be noted that the guarantee period and the statute of limitations are not the same concept, and the legal consequences are more stringent: the expiration of the statute of limitations only allows the debtor to obtain a right of defense, while the expiration of the guarantee period means that the guarantor's liability itself is extinguished. Therefore, when signing the guarantee agreement, attention should be paid to the length of the guarantee period, and within this period, the creditor should assert their rights in accordance with the law to produce the corresponding legal effects.

Q5: Can the guarantor ask the borrower to repay the money after they have paid it back?

Yes. After the guarantor pays off the debt on behalf of the debtor, the guarantor may recover the debt from the debtor within the scope of the payment, including the principal, the interest paid on behalf of the debtor, and reasonable expenses. The amount of the guarantor's subrogated payment shall not exceed the scope of the guarantee. In addition, attention should be paid to the responsibility sharing among multiple guarantors: where it is a joint guarantee and no share has been agreed upon, the creditor may request any one of the guarantors to bear responsibility within the scope of their guarantee, and the guarantor shall recover the debt from the debtor after assuming the responsibility; where it is a separate guarantee, the guarantors shall bear responsibility in accordance with the agreed shares.

The above answer is based on the judicial practice in the Beijing area. The adjudication standards in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →\nLegal services for creditor-debtor disputes·Attorney Tian Jiaoyan·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In the event of a dispute, please consult a practicing lawyer in a timely manner.