What is the new policy for guarantors who are unable to repay their debts

The new policy of insolvency allows for a deferral of repayments with the consent of creditors. According to the relevant laws and regulations of China, the borrower's liability for overdue return of the loan: if the borrower fails to return the loan within the agreed time limit, the borrower shall pay the overdue interest in accordance with the agreement or the relevant provisions of the state.

In addition, the provisions for the extension of the loan are as follows: the borrower can apply to the lender for an extension before the expiration of the repayment period; If the lender agrees, it can be extended.

Legal basis. Article 676 of the Civil Code of the People's Republic of China [Borrower's Liability for Overdue Return of Loans] If the borrower fails to return the loan within the agreed time limit, it shall pay overdue interest in accordance with the agreement or relevant state regulations.

[Legal Analysis].The guarantor shall bear the guarantee liability in the event that the debtor is unable to repay the arrears.

1. General guarantee: the creditor can only bear the guarantee liability when the debtor fails to perform the debt;

2. Joint and several guarantee: The creditor can not only pay the debtor but also require the guarantor to bear the guarantee liability after the debt is due.

Legal basis. Civil Code of the People's Republic of China

Article 686: The forms of guarantee include general guarantee and joint and several liability guarantee. If the parties do not agree on the form of guarantee in the guarantee contract or the agreement is not clear, they shall bear the guarantee liability in accordance with the general guarantee.

Article 687:Where the parties agree in the guarantee contract that the guarantor shall bear the guarantee liability when the debtor fails to perform the debt, it is a general guarantee. The guarantor of a general guarantee has the right to refuse to bear the guarantee liability to the creditor before the main contract dispute has not been tried or arbitrated, and the debtor's property is still unable to perform its obligations in accordance with the law, except in any of the following circumstances:

1) The debtor's whereabouts are unknown and there is no property available for enforcement;

2) the people's court has accepted the debtor's bankruptcy case;

3) The creditor has evidence to prove that the debtor's property is insufficient to perform all debts or that it has lost the ability to perform debts;

4) The guarantor waives the rights provided for in this paragraph in writing.

Article 688:Where the parties stipulate in the guarantee contract that the guarantor and the debtor shall be jointly and severally liable for the debt, it is a joint and several liability guarantee. In the event that the debtor of the joint and several liability guarantee fails to perform the debts due or the circumstances agreed upon by the parties occur, the creditor may request the debtor to perform the debts, and may also request the guarantor to assume the guarantee liability within the scope of the guarantee.

Article 689:The guarantor may request the debtor to provide a counter-guarantee.

The above is only the current information combined with my understanding of the law, please refer to it carefully!

If you still have questions about this issue, it is recommended that you organize the relevant information and communicate with a professional in detail.

Legal analysis: The guarantor bears the same repayment liability as the debtor. If either the guarantor or the debtor is unable to repay the debt, the court will not deal with it.

Incapacity here means complete inability to repay. If there is a partial ability to repay, part of the repayment must be made, otherwise, it is a refusal to enforce the judgment, and the court may take enforcement measures such as fines and detention against it.

Legal basis: Article 687 of the Civil Code of the People's Republic of China: Where the parties agree in the guarantee contract that when the debtor fails to perform its obligations, the guarantor shall bear the guarantee liability, it is a general guarantee. The guarantor of a general guarantee has the right to refuse to bear the guarantee liability to the creditor before the main contract dispute has not been tried or arbitrated, and the debtor's property is still unable to perform its obligations in accordance with the law, except in any of the following circumstances:

1) The debtor's whereabouts are unknown and there is no property available for enforcement; 2) the people's court has accepted the debtor's bankruptcy case; 3) The creditor has evidence to prove that the debtor's property is insufficient to perform all debts or that it has lost the ability to perform debts; 4) The guarantor waives the rights provided for in this paragraph in writing.

The guarantor's insolvency is handled as follows:

1. Under normal circumstances, as a debt guarantor, if it is temporarily unable to repay, it can reach a settlement with the creditor during the execution process and request permission to extend or repay the debt in installments;

2. If the debt guarantor is permanently unable to repay the debt, then the debtor can only pay it off by himself.

Legal basis. Article 386 of the Civil Code of the People's Republic of China.

The holder of the security interest shall enjoy the right to be repaid in priority in respect of the secured property in accordance with the law in the event that the debtor fails to perform the due debt or the parties agree to realize the security interest, except as otherwise provided by law.

Article 388.

To create a security interest, a security contract shall be concluded in accordance with the provisions of this Law and other laws. Guarantee contracts include mortgage contracts, pledge contracts and other contracts with security functions. The guarantee contract is a subordinate contract of the main creditor's rights and debts.

If the principal creditor's rights and debts contract is invalid, the guarantee contract shall be invalid, except as otherwise provided by law.

After the guarantee contract is confirmed to be invalid, if the debtor, guarantor and creditor are at fault, they shall each bear the corresponding civil liability according to their fault.

What are the circumstances under which a guarantee is required when taking out a loan?

1. When the borrower lacks collateral or the collateral value is insufficient;

2. When the borrower lacks proof of financial resources;

3. The borrower's qualifications are not good enough.

In the case of a general guarantee, then in accordance with the provisions of paragraph 2 of Article 25 of the Guarantee Law, if the creditor does not file a lawsuit or apply for arbitration against the debtor during the guarantee period agreed in the contract and the guarantee period specified in the preceding paragraph, the guarantor shall be exempted from the guarantee liability.

You can only sue or apply for arbitration against the debtor (if there is an arbitration agreement between you and the debtor) and then the guarantor can be held liable if the debtor is truly unable to repay after the judgment.

In the case of joint and several liability guarantees, in accordance with article 26 of the Guarantee Law, the creditor may directly sue the guarantor to bear the debt during the guarantee period.

Under normal circumstances, the guarantor's inability to repay the debt property can be frozen by the court, and if the court's judgment orders the debtor to repay, then the guarantor's property can be enforced if the debtor has no property.

Where the parties stipulate in the guarantee contract that the guarantor and the debtor shall be jointly and severally liable for the debt, it is a joint and several liability guarantee. If the debtor of the joint and several liability guarantee fails to perform the debt upon the expiration of the debt performance period specified in the main contract, the creditor may require the debtor to perform the debt, and may also require the guarantor to bear the guarantee liability within the scope of the guarantee.

If it is verified that the guarantor does not have assets to be enforced, the people's court may take or notify the relevant units to assist in taking measures such as restricting the guarantor's exit, recording it in the credit reporting system, publishing information on non-performance of obligations through **, and other measures provided by law.

It will also be on the credit report and become blacklisted.