Deivasigamani 06 October 2022

Cheque bounce

Dear sir/s

I have given guarantee for the loan took from money lender. First party given interest so far suddenly absconded what is the issue can be raised against me please advise

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Quick Summary

This discussion addresses the responsibilities of a guarantor when a borrower absconds after taking a loan from a money lender. The guarantor is advised that absconding doesn't end their liability; they may be required to repay the loan if the borrower's assets are insufficient. The guarantor also has the prerogative to revoke their guarantee. Clarification is sought on whether a criminal case or warrant against the borrower impacts the guarantor's position.

3 Replies

Pradipta Nath (Advocate) 06 October 2022

Abscond is not the end of everything. It is about declaring insolvent. The creditor will have to see every attempt like selling or taking possession of the property of the debtor, in spite of that if the loan repayment amount lacks, the guarantor need to repay.

Further it is your prerogative to remain as a guarantor or not after he absconded.

Deivasigamani 06 October 2022

Dear Sir/s

Thanks for the update.
the party paid 5% monthly interest for a sum of Rs.3 lakhs also paid interest till june 2022. is there any possibility to revoke the guarantee and cheque given by me.

Kindly advise