Guaranter for a Bank OD

Guarantor's liabibility is co-extensive with that of principal debtor.  Bank even may leave the Principal debtor and start recovery proceedings against the guarantor, if it feels that going against principal debtor may not fetch the results.  Your present liabilities are the matter.  Nobody can force you to give guarantee.  If you are not cent per cent willing to give guarantee, better you avoid the same.

Thank You sir for your reply.

The issue is that, property against which the loan is being taken is an HUF property and I being a member of the HUF, is being forced by my family to become a guaranter for it. What are the consequences of me not becoming as a guaranter?

Will my father be able to renew his loan, without me being a guaranter?

Thanks

Naikur

If bank is considering a loan against the mortgage of property of HUF, all members of HUF should join either as joint borrowers or guarantors.  In case of default, apart from the property mortgaged all are liable jointly and severally.  If Bank is considering overdraft (whether this facility is new or existing, it is not clear in the query) against the HUF property as collateral (mortgage), all the members of HUF should join.  If it a new facility, bank will not be able to sanction overdraft facility by taking mortgage of HUF property if all the members do join either as co-borrowers or guarantors. Generally Banks discourage considering any facility when the property of HUF is offered as security in normal circumstances.