A guarantor is someone who agrees to pay a debt or fulfil an obligation if the primary debtor fails to do so. A guarantor should only agree to be a guarantor in Singapore when they are financially capable of taking on the obligation and understand the risks involved.
Can you remove yourself as a guarantor in Singapore?
Generally speaking, it is not possible to remove yourself as a guarantor in Singapore once you have signed a guarantee. A guarantee is a legally binding contract and you will remain liable for the debt until it is paid in full.
What are the exceptions?
There are some exceptions to this rule. You may be able to remove yourself as a guarantor if:
- The primary debtor takes over the debt. If the primary debtor takes over the debt and agrees to pay it themselves, you may be released from your obligation as a guarantor.
- The creditor agrees to release you. The creditor may agree to release you from your obligation as a guarantor, but this is unlikely.
- The guarantee is void. The guarantee may be void if it was obtained through fraud or misrepresentation.
What should you do if you want to remove yourself as a guarantor?
If you want to remove yourself as a guarantor, you should speak to a lawyer. A lawyer can advise you on your legal options and help you to negotiate with the creditor.
Tips for avoiding becoming a guarantor
If you are considering becoming a guarantor, there are a few things you can do to avoid the risks:
- Only agree to be a guarantor for someone you know and trust.
- Make sure you understand the risks involved.
- Get legal advice before you sign a guarantee.
- Consider taking out insurance to protect yourself.
Conclusion
Being a guarantor can be a risky undertaking. If the primary debtor defaults on the debt, you may be liable for the full amount. It is important to understand the risks involved before you agree to be a guarantor. If you have any concerns, you should speak to a lawyer.
Table: Pros and cons of being a guarantor
| Pros | Cons |
|---|---|
| Helps the primary debtor to obtain a loan | You are liable for the debt if the primary debtor defaults |
| Can improve your credit score | Can damage your credit score if the primary debtor defaults |
| Can earn you a commission | Can cost you money if the primary debtor defaults |
Frequently Asked Questions
- Can I remove myself as a guarantor if the primary debtor dies?
No, you cannot remove yourself as a guarantor if the primary debtor dies. However, you may be able to negotiate with the creditor to reduce your liability. In rare cases, you may be able to get a court order to discharge your guarantee.
- Can I remove myself as a guarantor if the primary debtor becomes bankrupt?
No, you cannot remove yourself as a guarantor if the primary debtor becomes bankrupt. However, the creditor may be able to recover the debt from the bankrupt’s estate.
- Can I remove myself as a guarantor if the creditor sells the debt to a third party?
No, you cannot remove yourself as a guarantor if the creditor sells the debt to a third party. The third party will have the same rights as the original creditor.
