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Bank Loan | Co-maker

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1 Bank Loan | Co-maker on Mon Apr 11, 2011 2:32 pm

gobigdaddy


Arresto Menor
Good day! I need some advise regarding an outstanding loan from a bank. I agreed to sign as co-maker for a colleague for a loan amounting to around 200k, this was around 4 years ago. I lost contact with this colleague since he moved to a different company. Around 2 years ago the bank sent me what looked like a demand letter asking that I cover the payments, apparently my colleague did not make any payments. I got in touch with the bank and gave all contact details I had for my previous colleague for them to try to locate and collect from him. Did not hear anything from the bank so I assumed they were successful in finding him.

Two week ago I got a call from the bank saying that they have not been able to contact him, they are claiming that since no payments were made, outstanding amount now is 300k factoring in the interest. He also mentioned they had filed a case in court against my colleague and I, and since we failed to make an appearance, they will proceed with seizing assets. I never received any summons, but i did move to a different address since then.

My questions are, do they have the right to seize assets given that I am just the co-maker and not the principal borrower? Do I have any rights as a co-maker? I remember signing an agreement that I am co-maker but did not issue any checks to them. I do not have the capacity to pay right now but I do have a car registered under my name, this is still being paid for with monthly checks to a different bank where i got a car loan. Can they potentially seize that?

Thanks in advance for the help. Hope to hear from you soon.

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2 Re: Bank Loan | Co-maker on Tue Apr 12, 2011 7:22 pm

attyLLL


moderator
find out the details of this case and check with the court if it is true. are you dealing with the bank or a collection agency?

the bank has the right to claim from you. you have the right to claim from the principal debtor.

yes, they might seize the car, but the would have to absorb the loan.


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3 Re: Bank Loan | Co-maker on Tue May 03, 2011 11:59 am

rrramos28


Arresto Menor
Atty, the obligation of principal and co-maker are the same? Am i right?

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4 Re: Bank Loan | Co-maker on Thu May 05, 2011 6:30 pm

attyLLL


moderator
yes


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5 Re: Bank Loan | Co-maker on Thu May 05, 2011 6:42 pm

You may want to check this out:

A co-maker is generally treated as a surety. In a contract of suretyship, one lends his credit by joining in the principal debtor's obligation, so as to render himself directly and primarily responsible with the principal debtor. A surety is bound equally and absolutely with the principal, and is deemed an original promisor and debtor from the beginning. This is because in suretyship there is but one contract, and the surety is bound by the same agreement which binds the principal. The lender has the option of proceeding against the principal debtor, directly against the co-maker even without trying to collect from the principal debtor, or simultaneously against both. This is without prejudice to the right of the co-maker to go against that principal debtor for reimbursement.

In some instances, the co-maker would argue that he/she is merely a guarantor, not a surety. The two concepts, of course, are different. A surety is an insurer of the debt, whereas a guarantor is an insurer of the solvency of the debtor. A suretyship is an undertaking that the debt shall be paid; a guaranty, an undertaking that the debtor shall pay. Stated differently, a surety promises to pay the principal's debt if the principal will not pay, while a guarantor agrees that the creditor, after proceeding against the principal, may proceed against the guarantor if the principal is unable to pay. A surety binds himself to perform if the principal does not, without regard to his ability to do so. A guarantor, on the other hand, does not contract that the principal will pay, but simply that he is able to do so. In other words, a surety undertakes directly for the payment and is so responsible at once if the principal debtor makes default, while a guarantor contracts to pay if, by the use of due diligence, the debt cannot be made out of the principal debtor. [Palmares vs. CA, G.R. No. 126490, 31 March 1998]

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6 Re: Bank Loan | Co-maker Today at 7:16 am

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