The withdrawal of the guarantor from the guarantee is when a person or entity that had agreed to provide security to the borrower decides to terminate its guarantee liability in a security agreement. The following is an in-depth explanation of how the guarantor withdraws the guarantee from 6 different ways:
1.Terms of Contract
First of all, the guarantor should carefully study the specific terms of the guarantee contract to understand the circumstances under which the guarantee can be withdrawn. Some contracts may contain specific conditions or events, such as debt repayment, an increase in the borrower's credit rating, etc., and the guarantor has the right to withdraw from the guarantee after these conditions are met.
2.Negotiated termination
The guarantor may negotiate with the borrower and the creditor to seek mutual agreement to terminate the security relationship. In such cases, the guarantor will need to demonstrate that the risk to them to the benefit of the creditor has been sufficiently discharged, or that other acceptable alternative security options are found.
3.Assignment of debts
If the debt is assigned to a third party, such as another institution or individual, the guarantor may apply for the revocation of the guarantee. During this process, the guarantor needs to ensure that the new creditor agrees and agrees with the original creditor.
4.Legal process
According to the terms of the law, the guarantor may have the right to terminate the guarantee in certain circumstances. This may involve filing a lawsuit in court and providing relevant evidence and reasons to support the request to set aside the guarantee.
5.Pay off your debts
If the borrower has repaid the debt in full, the guarantor can request the revocation of the guarantee. In this case, the guarantor should ensure that it receives a complete confirmation of debt repayment and negotiate with the creditor to release the guarantee.
6.Negotiate a new contract
The guarantor can enter into an agreement with the borrower and the creditor to enter into a new security contract to free it from the original guarantee liability. This requires all parties involved to agree and sign a new agreement that explicitly dissolves the old security relationship.
It should be noted that it is not always easy to revoke a guarantee, as there are various legal, contractual and economic factors. The guarantor should seek professional legal advice and communicate adequately with the borrower and creditors to ensure compliance with applicable regulations and minimise adverse effects on other interested parties.