[Direct answer]In the Beijing area, the right of defense of the guarantor in a general guarantee is the core defense right of the guarantor. According to Article 687 of the Civil Code of the People's Republic of China, a guarantor who has agreed to provide a general guarantee has the right to refuse to assume the guarantee responsibility before the creditor is unable to perform the obligation by legally enforcing the debtor's property. Since the implementation of the Civil Code, if the guarantee mode is not clearly stipulated in the agreement, it shall be presumed to be a general guarantee, and this right applies more widely. However, there are exceptions: if the debtor is untraceable and has no property, or if the court accepts the debtor's bankruptcy, the guarantor may not claim this right. It is recommended to clearly stipulate the guarantee mode in the guarantee contract, and when being sued, first check whether the creditor has exhausted the enforcement of the debtor's property before deciding whether to exercise this right of defense. For more details, please refer to the relevant provisions of the Civil Code of the People's Republic of China.Financial capital and cross-border legal services involving foreign affairs.

I. Problem Background and Typical Scenarios

The right of prior recourse is commonly seen in scenarios involving third-party guarantees, such as private lending, sales contracts, and financial loans. Typical situations include: the lender directly suing the guarantor to demand repayment while the main debt dispute has not yet undergone enforcement; the creditor recovering the debt from the guarantor when the debtor still has properties or deposits available for enforcement; and the guarantee contract only stating "guarantee" without specifying the guarantee method, leading to disputes over general guarantees and joint and several liability guarantees. Many business owners or individuals, when signing guarantees for others' loans, do not understand the order of their rights and obligations, and unwittingly assume repayment responsibilities that could have been postponed. Understanding this right can help guarantors delay or exempt themselves from liability within legal limits. For more guarantee arrangements, please refer to the following sources:\nFinancial capital and cross-border legal services involving foreign affairs.

II. Key points of contention

There are three main points of contention regarding the right of prior litigation defense. Firstly, the determination of the guarantee method: According to Article 686 of the Civil Code, if the guarantee contract does not stipulate or stipulate an unclear guarantee method, the guarantor shall bear the general guarantee obligation and enjoy the right of prior litigation defense. This is a significant change from the presumption of joint and several liability in the old law. Secondly, whether the creditor has "prior litigation": Judging whether the creditor has applied for compulsory execution against the debtor's property without success is a prerequisite for the guarantor to refuse to assume responsibility. Thirdly, the application of exceptional circumstances: When the debtor's whereabouts are unknown and there are no assets, bankruptcy proceedings have been initiated, or the guarantor has waived this right in writing, the right of prior litigation defense no longer applies. The legality of the relevant guarantee arrangements can be assessed in conjunction with the above provisions.Creditor-debtor relations and enforcement case servicesCoordinate and make judgments comprehensively.

III. Professional analysis by Hengluo Law Firm

Based on practical observations in handling guarantee and enforcement cases, the most easily overlooked aspect of the right of prior litigation defense by guarantors is the change in the presumption rules when the guarantee mode is not clearly defined. Many guarantee contracts only state "assuming joint and several liability" or simply "guarantee". Once the agreement is unclear, according to the current Civil Code, it is presumed to be a general guarantee, and the guarantor is entitled to the right of prior litigation defense according to law. However, in practice, there are also cases where the explicit agreement of "joint and several" is directly recognized. Hengluo Lawyers usually recommend that when being sued, first require the creditor to prove that there has been no successful enforcement against the principal debtor's property, otherwise, the guarantor can legally refuse to assume responsibility externally; at the same time, check whether there are documents waiving the right of prior litigation defense in writing. For cases involving enforcement priority, it can be followed up accordingly.Creditor-debtor relations and enforcement case servicesReview the actual situation of the debtor's property available for enforcement.

IV. Practical suggestions and legal basis

The legal basis is mainly Article 686 of the Civil Code of the People's Republic of China (effective January 1, 2021) (Presumption of Unclear Agreement on Guarantee Modes), Article 687 (General Guarantee and Right of Prior Defense and Its Exceptions), and Article 688 (Joint and Several Liability Guarantee). Practical advice: When signing a guarantee contract, it is necessary to specify the guarantee mode clearly to avoid vague expressions such as "guarantee"; when being directly pursued by the creditor, first check whether the creditor has applied for compulsory enforcement against the principal debtor's property and failed to achieve the effect; pay attention to collecting clues about the debtor's property to prove that the conditions for prior defense have not been satisfied; and avoid signing written documents waiving the right of prior defense at will. For enterprise financing guarantees, it can be combined with other relevant provisions.Business and contract dispute services for enterprisesEvaluate the terms and conditions risk.

5. Henglu Law Firm's Advice

The right of first recourse is a legitimate "sequential benefit" for the guarantor, but it is by no means an unlimited delaying tool. Remember: if the guarantee method is not clearly stipulated, it shall be presumed to be a general guarantee according to law. You have the right to request the enforcement of the principal debtor's property first; but this right has statutory exceptions. Do not stubbornly insist on it when the debtor is bankrupt or has waived it in writing, so as to avoid bearing breach of contract liability and additional costs. When being sued, you should actively provide evidence that the debtor still has enforceable property and consult a professional lawyer in time to design a defense plan. If you need to coordinate the guarantee and enforcement, you can seek help from a professional lawyer.Special services and other case servicesClarify the responsibilities and liabilities of all parties involved, as well as the paths for seeking compensation.

VI. Frequently Asked Questions

Q1: If the guarantor exercises the right of prior recourse defense, can he ultimately refuse to assume responsibility?

The success of exercising the right of prior litigation defense depends on the guarantee method and the progress of enforcement. If the contract clearly stipulates a general guarantee, or if the guarantee is not specified and is presumed to be a general guarantee according to the Civil Code, and the creditor has not yet enforced the debtor's property without success, you have the right to refuse to assume responsibility in advance according to law. However, if the contract stipulates a joint and several liability guarantee, or there are exceptions such as the debtor's bankruptcy, disappearance, and lack of assets, and you have waived this right in writing, the right of prior litigation defense will no longer apply, and the creditor may directly require you to pay off the debt. The outcome does not depend on a promise, but on the contract text and the facts of enforcement. It is recommended to first retrieve the enforcement materials of the main debtor to make a judgment.

Q2: If I want to assert the right of defense by counterclaim, what evidence do I need to prepare?

To exercise the right of defense in prior litigation, evidence should be organized around the "creditor's failure to first enforce the debtor's property": the main debt contract and the guarantee contract (proving the guarantee method), the debtor's property clues (such as real estate, bank deposits, equity information), the creditor's notice or lawsuit directly seeking recovery from you, and evidence proving that the debtor still has enforceable property (such as real estate registration information and industrial and commercial information). The core is to prove that the pre-litigation conditions have not been met, that is, the creditor has not yet enforced the main debtor by law and the debtor is still unable to perform. If the materials are sufficient, the party can claim to first enforce the main debtor in court; if necessary, apply to the court to investigate the debtor's property situation.

Q3: If I am sued for assuming guarantee liability, how much will the attorney's fees and litigation costs be?

The litigation fees shall be calculated in accordance with the "Measures for the Payment of Litigation Fees", based on the amount of the litigation request, and shall be borne by the losing party. When the guarantor is sued, the fees shall be calculated based on the amount of the guarantee debt claimed by the creditor. The attorney's fees shall be calculated according to the complexity of the case, the amount of the subject matter, and the workload, either on a fixed-fee basis or as a percentage of the subject matter amount, subject to the terms of the engagement contract, with no unified government pricing. If the guarantor successfully exercises the right of prior recourse and forces the creditor to first enforce the main debtor, it can reduce the cost of being directly enforced against itself. It is recommended to consult a lawyer to assess the defense space at the early stage of being sued, compare the attorney's fees with the potential compensation amount, and make a rational decision.

Q4: How long does the procedure of raising a claim for the right of first recourse typically take?

When a creditor sues a guarantor, the case is typically concluded within six months in the first-instance ordinary procedure and three months in the summary procedure. If the guarantor raises a prior-suit defense, the court may rule to first enforce against the principal debtor or suspend the enforcement against the guarantor, with the duration extending according to the progress of the enforcement against the principal debtor. If the principal debtor has already entered the forced execution stage without success, the determination of the guarantor's liability will be faster; if it is necessary to first initiate enforcement against the principal debtor, it is common for the overall recovery of funds or the assumption of liability to take years. The second-instance trial typically lasts three months. It is recommended to raise a prior-suit defense in the litigation and cooperate in providing clues to the debtor's assets to shorten the uncertain period.

Q5: As a guarantor, what specific steps should I take to protect my rights?

It is recommended to handle the matter in four steps: First, after receiving the notice of recourse or the materials for litigation, immediately verify the guarantee method in the guarantee contract. If the agreement is unclear, it shall be presumed as a general guarantee according to law; Second, collect clues about the principal debtor's property to prove that he still has enforceable property and the conditions for pre-litigation have not been met; Third, explicitly raise the right of pre-litigation defense in litigation or negotiation, and require the creditor to first enforce the principal debtor's property; Fourth, never sign written documents waiving the right of pre-litigation defense. If necessary, entrust a lawyer to intervene and coordinate the guarantee and enforcement procedures to maximally protect the interests of the order. You can seek assistance from a professional organization or a lawyer to handle this matter.Special services and other case-related servicesFurther evaluate the plan.

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

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Financial capital legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on current 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.