My brother took loan from sbi bank in 2018 and I was guarantor for the same...But due to Covid his business was closed and he was unable to pay the emi...now the bank is torturing me for repayment...My financial condition is also collapsed due to covid...we have filed case in court and bank is not ready to accept emi..they are asking one time payment..which is not possible. plz advice...if borrower is present then can bank take legal action against guarantor....and what are the legal actions in such cases...plz advice
If the primary borrower defaults on loan repayment, the liability to pay the outstanding amount falls on the loan guarantor. In case of non-payment, a guarantor is liable to legal action. If the lender files a recovery case, it will file the case against both the borrower and the guarantor.
As per your query let me inform you that a guarantor is someone who agrees to be responsible for someone else's payment of debt if the latter makes a default on payments of loan. Therefore, being a guarantor is not a mere formality to help the borrower, the guarantor is equally responsible for paying off the loan.
Hence, there is merely nothing you can do as per the situation you've stated except compromising the amount with the bank. Since you were your brothers guarantor and your brother has defaulted in paying the borrowed amount, the bank could take appropriate actions as per the law against both you're brother as well as you since you both are parties to the transaction i.e. (borrower and guarantor respectively).