Do you need a deposit to get a consumer credit?
Verified 13 June 2024 - Directorate for Legal and Administrative Information (Prime Minister)
The bank asks you to have a bond before granting you a consumer credit? Do you have a relative who wants you to post a bond for his consumer loan? We present the applicable rules.
Definition
The guarantor is a person who commits, through a contract of guarantee, to repay the bank in your place in case of default on your part.
The deposit may be a natural person which enjoys the legal capacityEven if she's not related to you.
Bail can also be a legal person (specialist business, health mutual...).
Different types
There are 2 types of surety, depending on the level of commitment of the person who is surety: simple surety and joint surety.
In the case of simple guarantee, in the event of a payment incident, creditor must first sue you before going to the person who has taken the bond.
In the case of joint and several guarantee, the creditor may apply directly to the guarantor as from 1er payment incident, without even bringing a lawsuit against you.
Bail is sometimes imposed by law or by the courts.
When it is imposed by law, we are talking about legal depositand when it is imposed by the courts, it is referred to as court bond.
You don't have to have a bond to be able to get a consumer credit. But the bank can refuse to grant you the loan if you don't have a bond.
The bond must be posted by a written act.
The written document may be in paper form or in electronic form.
The undertaking to act as guarantor must be clearly expressed by the natural person or the signatory legal person.
If the deposit is a natural person, it must affix herself on the security document a mention which includes the following:
- The person declares commit to as security
- The person states that the commitment he or she makes is to to pay to the creditor what the debtor owes him, in the event of default by the debtor
- The person indicates the financial limit of its commitment (amount of credit and incidental expenses) in all letters and figures
- The person acknowledges that it is unable to require the creditor to pursue the debtor or other security (if agreed between the parties).
FYI
If the natural person who is guarantor does not put the words with these various elements on the guarantee document, it will not be valid.
If you are a guarantor for a loved one who makes a consumer loan with a professional (bank, financial institution), the professional has obligations towards you.
Informing the guarantor of the debtor's situation
The professional creditor has the obligation to warn you if he finds that the commitment made by your loved one who makes the loan exceeds his financial capacities.
If the professional creditor does not make this warning, he or she will not be able to claim payment from you in the event of default by the borrower.
Verification of the surety's financial situation
The professional creditor must check whether your income and wealth allow you to make the commitment to pay for your loved one in case of default on his part.
If it appears that the commitment you made was manifestly disproportionate to your income and wealth, the professional creditor will not be able to claim payment of the entire debt from you in the event of default by the borrower.
The debt will be reduced to the amount that corresponds to your financial capacity at the date of signing the contract.
Annual information of the guarantor on the state of the debt
The professional creditor must communicate to you in writing, before March 31 of each year, the following elements:
- Amount of principal outstanding
- Amount of interest, costs and commissions outstanding as at 31 December of the previous year
- End date of commitment of the guarantor, in the case of fixed-term guarantees
- Possibility of termination of the commitment, in the case of a guarantee for an indefinite period.
If the lender does not provide you with this information, you will only be required to repay the principal borrowed, without any interest or late payment penalties due.
Reporting of payment incidents to the surety
The professional creditor must inform you of the default of your relative who is the borrower as from 1er payment incident not settled in the month in which the payment becomes due.
If the professional creditor fails to comply with this obligation, he will not be able to claim the interest and penalties corresponding to the period between the date of the incident and the date on which you informed him of it.
The situation varies depending on the type of bond that was chosen, and depending on the clauses of the bond that was signed:
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Simple guarantee
If the person for whom you have taken the security does not repay, the creditor can claim all the amounts due.
You can ask the creditor for the benefit of discussion. This is a mechanism that obliges the creditor to sue the principal debtor first before suing the surety if the debt has not been fully repaid.
Warning
You cannot invoke the benefit of discussion if the bond you have signed contains a clause that excludes its application from this mechanism.
When there are multiple bonds for the same debt, and the creditor sues you, you can ask them to apply the division profit.
Warning
You may not invoke the benefit of division if the guarantee you have signed contains a clause that excludes the application of this mechanism.
Joint and several guarantee
If the person for whom you have taken the security does not repay, the creditor can claim all the sums that he owes.
Even if there are several sureties, you cannot invoke the benefit of discussion before the creditor. It's a mechanism that obligates the creditor to sue the principal debtor first before going back against the surety.
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