By Christopher C. Hagenow, Blackwell Burke & Ramsey PC
We all have favorites: favorite food; favorite song; favorite movie; favorite sports teams; etc.
When it comes to the law, however, we believe that the law does not play favorites: i.e. we all are equal in the eyes of the law. Well, actually there are certain people who receive favoritism from the law, and no, it has nothing to do with political affiliation, money, race, gender, or anything of the sort.
Who are these people and how and why are they given favorable treatment? They are called “guarantors”, or sometimes called “sureties”. A guarantor (or surety) is someone who “guarantees” repayment of a debt of another person or entity. A common example is when an owner of a small business is required by a bank to guarantee repayment of the loan made by the bank to the company. Recall that a shareholder of a company is not personally liable for the debts of the company. However, if that shareholder signs a guaranty of a particular debt, that creates a contract between the guarantor and the bank so that the bank can collect the loan from the guarantor in the event that the company fails to repay the loan.
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