[Direct answer]In the Beijing area, if the borrower fails to repay the loan on time and the guarantor refuses to assume responsibility, the creditor may sue both the debtor and the guarantor according to the guarantee contract. According to Article 681 of the Civil Code of the People's Republic of China (effective January 1, 2021), a guarantee contract is a contract that guarantees the creditor's rights and obliges the guarantor to perform the debt or assume responsibility when the debtor fails to fulfill his obligations on time; Article 688 stipulates that the order of recourse shall be determined by the rules of general guarantee and joint and several liability guarantee, and the joint and several guarantors shall bear the same repayment responsibility as the debtor. It is recommended to verify the guarantee period and the statute of limitations as soon as possible to avoid losing the guarantee, and if necessary, entrust a lawyer to sue and apply for property preservation. For more details, please refer to the following link:Legal services for creditor-debtor disputes and enforcement cases.

1. Problem background and typical scenarios

In private lending, credit sales, and financial borrowing, creditors often require debtors to provide a third party as a guarantor. Typical disputes include: when the debtor goes missing after the loan maturity, the creditor seeks the guarantor but is rejected with the excuse of "enforcing the debtor first"; co-guarantors mistakenly believe they are just "witnesses" and do not need to repay the loan; after the guarantee period has passed, the creditor reasserts the claim and the guarantor successfully escapes liability; and when the guarantor makes repayments on behalf of the debtor, the debtor is blocked from recovering the repayment. The key to such cases lies in clarifying the guarantee method, the guarantee period, and the statute of limitations. Any omission in any of these aspects may result in the creditor's rights being frustrated. It can be combined withLegal services for creditor-debtor relations and enforcement casesEvaluate the order of claim recovery.

II. Key points of dispute

The core disputes in cases where the guarantor fails to repay the loan include: First, the determination of the guarantee mode. If there is no explicit agreement, it is presumed to be a general guarantee, which directly affects the order of recourse; Second, the guarantee period. According to Article 692 of the Civil Code, the creditor and the guarantor may agree on the guarantee period. If there is no agreement or the agreement is unclear, it shall be six months from the date of expiration of the main debt performance period. If the creditor does not request rights within the guarantee period, the guarantor shall no longer bear the guarantee responsibility; Third, the statute of limitations. The statute of limitations for the main debt and the guarantee debt are calculated separately; Fourth, the guarantor's right of defense. Under circumstances such as unauthorized modification of the main contract and fraud by the debtor, the guarantor may claim exemption from liability. In practice, "loss of guarantee" is the most common cause of failure.

III. Professional analysis by Henglue Lawyers

When handling disputes over guarantee contracts, Henglue Lawyers found that the majority of cases where creditors lost the litigation often stemmed from "emphasizing promissory notes while neglecting guarantee clauses". In terms of substance, when signing the contract, it is necessary to clearly stipulate "joint and several liability guarantee" and specify the specific guarantee period to avoid being presumed as a general guarantee and losing the right of direct recourse; in terms of preservation, when suing, the debtor and the guarantor should be listed together, and an application for property preservation and seizure of both parties' assets should be made; in terms of enforcement, for joint guarantors, the court can directly apply for compulsory enforcement, while for general guarantors, it is necessary to first enforce the debtor's property. In practice, it is also necessary to review whether the main contract involves revocable circumstances such as fraud or coercion, and whether the amount of the main debt is true, to prevent being "scapegoated" for artificially increasing the debt. When it involves company guarantees, it is also necessary to verify the company's resolutions and the signing authority of the legal representative, which can be referred to for reference.Legal services for corporate commercial and contract disputes.

IV. Practical suggestions and legal basis

At the legal basis level: Article 681 of the Civil Code (effective January 1, 2021) defines the guarantee contract; Article 686 stipulates that if the guarantee mode is not specified in the contract, it shall be presumed to be a general guarantee; Article 687 establishes the right of first-instance defense for general guarantees; Article 688 stipulates joint and several liability guarantees; Articles 692 and 693 clarify the guarantee period and the rules for losing guarantees; Article 700 stipulates the guarantor's right of recourse. Article 695 also stipulates the impact of changes to the main contract on the guarantee liability. Practical suggestions: Before lending or conducting transactions, require the guarantor to clarify the joint and several liability and stipulate the guarantee period; immediately assert rights and leave records (written collection, notarized delivery) after the due date; list the debtor and the guarantor in the lawsuit and apply for preservation; and apply for enforcement promptly after obtaining a judgment in favor of the plaintiff to prevent the guarantor from transferring assets. Related rights protection can be combined with the following measures:Legal services for creditor-debtor relations and enforcement casesAndSpecial services and legal services for other cases.

5. Henglue Law Firm's Reminder

The guarantor's liability is different from a moral commitment. It is a legal responsibility strictly regulated by the Civil Code. Creditors should not wait until the borrower has completely lost contact before thinking of the guarantor, and the guarantor should not sign the contract carelessly. Henglue Law Firm advises: For creditors, it is more important to clarify the guarantee method, period, and scope at the time of signing the contract than to seek recovery afterwards; for guarantors, it is essential to carefully check whether it is a general guarantee or a joint and several guarantee, and the guarantee amount and period before signing the contract. Do not be persuaded by the phrase "just helping out" and sign a blank contract. The earlier you fix the evidence and apply the guarantee rules accurately after a dispute arises, the greater the difference in the outcome. If you are currently facing the dilemma of a guarantor refusing to repay or being forced to make compensation, it is recommended that you consult a professional lawyer as soon as possible, bringing along the guarantee contract, the main contract, and communication records, to evaluate the paths of litigation, preservation of evidence, and recovery of compensation.

VI. Frequently Asked Questions

Q1: If the borrower absconds, can I directly ask the guarantor for the money?

It depends on the guarantee method. According to Article 686 of the Civil Code, if the parties do not stipulate or stipulate unclear guarantee methods in the guarantee contract, the general guarantor shall bear the guarantee liability in accordance with the general guarantee; Article 687 stipulates that the general guarantor enjoys the right of prior recourse defense, that is, the creditor can only require the general guarantor to bear the liability after the creditor's property has been enforced by law and still cannot be performed. If it is a joint and several liability guarantee (Article 688), if the debtor fails to perform the due debt, the creditor can either request the debtor to perform or directly request the guarantor to bear the guarantee liability within the scope of his guarantee. Therefore, after obtaining the IOU, it is necessary to clarify whether it is a "general guarantee" or a "joint and several guarantee", which directly determines whether you can skip the debtor and directly find the guarantor. The relevant procedures can be combined withLegal services for creditor-debtor relations and enforcement casesHandle it.

Q2: Can the guarantor just say "the guarantee period has passed" and not repay the debt?

Perhaps this is the power of the guarantee period system. According to Article 693 of the Civil Code, if the creditor of a general guarantee fails to file a lawsuit or apply for arbitration against the debtor within the guarantee period, the guarantor shall no longer bear the guarantee liability; if the creditor of a joint and several liability guarantee fails to request the guarantor to bear the guarantee liability within the guarantee period, the guarantor shall no longer bear the guarantee liability. The guarantee period is a preclusive period and is not subject to suspension or interruption. Once it has passed, the guarantee effect will be lost, and the guarantor will be permanently exempt from liability. Therefore, the creditor should promptly claim within six months after the maturity of the principal debt (if there is no agreement): for joint and several guarantees, directly request the guarantor to repay the debt and keep the evidence; for general guarantees, promptly sue the debtor. If the deadline is missed, even if the guarantor is financially strong, they may still be exempt from liability according to law, which is the significance of entrusting a lawyer to intervene as soon as possible.

Q3: I'm a joint guarantor. After being sued, am I obligated to repay the money for the borrower?

Under the premise that the joint and several guarantee and the principal debt are genuine and valid, it is basically impossible to refuse, but there is still room for defense. According to Article 688 of the Civil Code, if the debtor of the joint and several liability guarantee fails to perform the due debt, the creditor may directly request the guarantor to assume responsibility within the scope of the guarantee, and the court may order the guarantor to pay off the debt jointly or separately with the debtor. However, you can review the following grounds for exemption or reduction of liability: if the main contract is false or fraudulent, you can claim its invalidity; if the creditor unilaterally amends the main contract (such as extending the repayment period or increasing the amount) without your written consent, you do not bear responsibility for the amended part; if the guarantee period has passed, you are exempt from liability; if the principal debt amount is untrue, you can only be responsible for the true part. After making a substitute payment, you can recover the debt from the debtor in accordance with Article 700 of the Civil Code and realize the creditor's rights with the counter-guarantee provided by the debtor. It is recommended that when defending the lawsuit, a lawyer systematically sort out the guarantee clauses and the evidence of the principal debt to avoid over-reimbursement.

Q4: After the guarantor makes the repayment on behalf of the borrower, can the guarantor recover the full amount from the borrower?

In principle, this is possible, but subject to certain limitations in terms of scope and evidence. According to Article 700 of the Civil Code, after the guarantor assumes the guarantee obligation, unless otherwise agreed by the parties, the guarantor has the right to recover from the debtor within the scope of the guarantee obligation and enjoys the same rights as the creditor against the debtor, but shall not prejudice the creditor's interests. The scope of recovery includes the principal, interest actually paid by the guarantor, and reasonable expenses incurred in enforcing the creditor's rights; if the guarantor and the debtor have agreed on a counter-guarantee (such as a mortgage, pledge, or third-party guarantee), the guarantor may also directly exercise the counter-guarantee rights. The practical difficulties lie in the fact that the debtor often has no assets, and recovery may result in "winning the lawsuit but not getting the money". Therefore, before providing compensation, the guarantor should assess the debtor's repayment ability and strive to obtain a counter-guarantee; at the same time, retain the compensation vouchers, court documents, and payment records as the basis for recovery. If necessary, seek legal assistance.Beijing Henglu Law FirmHelp develop recovery and enforcement strategies.

Q5: If a friend asks me to act as a guarantor for a loan, what risks should I be aware of?

There are four main types of risks: First, the repayment risk. Under the joint guarantee, if your friend fails to repay the debt directly to you, you may have to bear the principal, interest, and penalty fees together; Second, the misjudgment of guarantee release. You may think that "you don't need to repay if the time limit has passed", but the guarantee will only be released if the creditor does not assert his rights during the guarantee period. If you sign the document carelessly, you may still be held liable; Third, the risk of having your property seized and sued. After being sued, your bank account and real estate may be preserved or subject to forced execution; Fourth, the risk of credit investigation and recovery. If the friend has no property after repayment, it will be difficult for you to recover the debt, and your own credit record will be damaged. Prevention suggestions: Try to only provide general guarantees and require them to be specified in writing; Set a guarantee amount cap and time limit; Require the borrower to provide counter-guarantees (real estate mortgages, third-party joint guarantees); Refuse to sign blank or unclear documents. If you regret signing the document, you should consult a lawyer as soon as possible to review whether the guarantee terms are complete and whether there are exemption clauses. For referenceLegal services for creditor-debtor relations and enforcement cases.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

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. →Legal services for creditor-debtor disputes·Beijing Henglu Law Firm