Loans and Loans: the Laws for the Protection of the Guarantor?

We have often been asked whether, in a loan in which you have signed as Guarantor, there is the possibility of not paying the debt or recovering the sum after having paid off the debt, requesting its repayment to the principal debtor.

Regarding the first hypothesis, namely that of not paying the debt, it is clearly not possible because the signature of the Guarantor has in fact the purpose of ensuring that a second party provides for the payment of the loan, and therefore the loan does not remain unresolved. Precisely by virtue of the guarantee offered by the Guarantor, the financial companies expose themselves most to finance subjects that, without the Guarantor, would not be eligible for them. Consequently, if the Guarantor has the right not to pay, the value that the Guarantor assumes in the assessment of a request for funding would be lost.

Regarding the second hypothesis, that is the one that provides for a hypothetical action of recourse by the Guarantor against the principal debtor, following the payment of the debt, there are 4 articles of the civil code that protect the action of recourse from part of the guarantor against the principal debtor. We list them below with the relative text:

  1. Article 1950 of the Civil Code: The guarantor who has paid has regressed against the principal debtor, although he was not aware of the guarantor.
    The regression includes the principal, interest and expenses that the guarantor has made after he has denounced the claims filed against him against the principal debtor.
    The guarantor is also entitled to legal interest on sums paid from the day of payment. If the principal debt produced interests in excess of the legal test, the guarantor is entitled to them until the repayment of the capital.
    If the debtor is incapable, the regression of the guarantor is permitted only within the limits of what has been turned to his advantage.
  2. Art. 1951 of the Civil Code: If there are several principal debtors who are jointly and severally liable, the guarantor who guaranteed for everyone has recourse against each to receive fully what he has paid.
  3. Art. 1952 of the Civil Code: The guarantor has no right of recourse against the principal debtor if, in order to have failed to denounce the payment made, the debtor has paid the debt equally. If the guarantor has paid without having given notice to the principal debtor, he may object to the exceptions which he might have been able to oppose to the principal creditor at the time of payment. In both cases the action for repetition against the creditor is reserved to the guarantor.
  4. Art. 2871 of the Civil Code: Rights of the third employer who paid the registered creditors or suffered expropriation. The third employer who paid the registered creditors or suffered the expropriation has regress against the debtor. If there are several debtors who are jointly and severally liable, the third party that made up the mortgage to guarantee everyone has a right of recourse against everyone for the whole (1292 and following). The third employer has recourse against the guarantors (1936 and following) of the debtor. It also regresses against other third-party employers for their respective portion (1299) and can exercise, also against third-party buyers, the sub-entry provided for in the second paragraph of Article 2866.

From the articles of the civil code that we have reported, it is clear how the Guarantor actually has the possibility to ask the debtor, or the insolvent debtors, the repayment of the capital repaid including the interests and expenses incurred as well as any legal fees.

It should be emphasized that credit institutions, or creditors in general, tend to request repayment of the debt first to the principal debtor, and subsequently to the guarantor. Often the debtor does not pay because he does not have the possibility to pay, and this makes it difficult for the guarantor to take action against the debtor. Instead, in cases where the debtor does not want to pay, the Guarantor can safely exercise the right of recourse against the defaulting debtor.



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