Lawyer - Surety

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cakesmasher
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Lawyer - Surety

Unread post by cakesmasher » Tue Dec 18, 2018 7:12 pm

Hi
Can anybody assist, I need to cancel a binding unlimited surety I signed for my daughter for a study loan +- 20 years ago with NEDBANK.
Nobody at Nedbank is willing to assist or guide me in the right direction.
How do I go about this?
Thanx
Gary
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Re: Lawyer - Surety

Unread post by rare bird » Tue Dec 18, 2018 9:42 pm

difficult one, Gary. The "smart-<<moderated - language>>" guys will say one should never sign surety for anything, but sometimes it is hidden in the fine print so that in the rush to get the study loan, or the patient admitted to hospital etc, one inadvertently signs your bank account away. That agreement is then stashed away in some Metrofile warehouse and may be difficult for you to get hold of. (there have been metrofile warehouse fires & floods, which may be to your advantage if you are lucky). Definitely change the bank account that was given at that time, and If you are on good terms with the person who could get you into debt, then set up an additional legal agreement with them.
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Re: Lawyer - Surety

Unread post by bosvark » Wed Dec 19, 2018 8:35 am

Have you received any notifications from Nedbank reminding you of your liability towards them? As far as I know, if they do not send you such reminders, it becomes prescribed just as a normal debt would.

If they cannot trace the physical document they can check their books for outstanding debt ito the study loan and a credit manager can sign a release. But again, if you haven't heard from then for the past 10 years I don't believe the suretyship carries any value anymore.
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Re: Lawyer - Surety

Unread post by Jel » Wed Dec 19, 2018 9:00 am

As Bosvark says...

First for me would be to request the document... you would be amazed at how often the banks cannot find the documents... they have it on record electronically but originals... not so much... #-o
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Re: Lawyer - Surety

Unread post by Jack Welles » Wed Dec 19, 2018 10:38 am

Just for starters you need to be able to answer a few questions:

1) What is the actual wording in the surety itself? Bear in mind that it is a contract.

2) Was it entered into before the NCA came into effect?

3) Has the principal debt been extinguished?

4) What sort of leverage do you have with the relevant bank? IOW, are you perhaps a good client?

The answer to those questions will then lead you to the other (probable) questions that will have to be answered, which will eventually lead you to what you can do to cancel the surety.

Depending on the degree of exposure and the background, ie, the circumstances that now exists between you and your daughter, I would recommend that you go see an attorney to sort out the situation. This relates to the urgency that may now exist with regard to this matter.
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Re: Lawyer - Surety

Unread post by HJK 414 » Wed Dec 19, 2018 10:48 am

Eddie,

Just a short interlude,

If a surety is signed to (co) guarantee repayment of a loan / debt .....
Once the loan / debt is paid in full - surely the surety (guarantee) automatically becomes void ??

JK
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Re: Lawyer - Surety

Unread post by Jack Welles » Wed Dec 19, 2018 11:08 am

HJK 414 wrote:
Wed Dec 19, 2018 10:48 am
Eddie, Just a short interlude, If a surety is signed to (co) guarantee repayment of a loan / debt .....
Once the loan / debt is paid in full - surely the surety (guarantee) automatically becomes void ?? JK
It depends on the wording of the surety (contract). IOW if it's very specifically limited to cover just that principal debt the answer would probably (there may be other terms in the surety that don't allow for this) be yes.

But IME sureties are normally worded exceptionally widely so as to cover every possible eventuality and that's why it depends on the wording.

In the instant case (as in most cases) ALL the facts have to be considered. There are three parties involved, father, daughter and bank. So even their interpersonal relationships would be relevant when trying to structure a satisfactory solution to the situation.
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Re: Lawyer - Surety

Unread post by C Africa » Fri Dec 21, 2018 6:57 am

Never trust a bank with something like this.

There was actually a court case of a similar situation some years back. Father had signed a surety on a study loan. 20 years later the son landed into serious trouble with the bank and the bank called on the surety. Unfortunately for the father (and generally the case), the wording of the surety was SO WIDE that the court sided with the bank and held the father liable.

If you don't personally receive back the original, then take my word for it, whatever surety you signed with a bank is still alive and well.

I had a bit of a personal experience of this. About 20 years ago I had an overdraft in a small company and signed surety. This company became dormant and the overdraft was cancelled years ago (as well as any other liability such as credit cards etc). Then recently I had the name of the company changed to use it for another venture. The banks monitor CIPC and I received a letter from them to inform me that I should take note that the surety that I signed in the old name will remain effective in the new company.

This happened despite the fact that there were no liabilities anymore!!!


C
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Re: Lawyer - Surety

Unread post by Jack Welles » Fri Dec 21, 2018 9:28 am

Sureties (contracts) don't expire (unless worded to do that) but they can be cancelled. You just have to go about it in the right way, dependent on the answers to the questions I posed earlier.

SA has freedom of contract (would anyone really have it any other way?) and everyone (of the appropriate age) is presumed to be adult enough to know what they are signing and why they are signing it.
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Re: Lawyer - Surety

Unread post by C Africa » Fri Dec 21, 2018 10:27 am

When you work with a bank, it is a kind of a blackmail situation.

You want this loan, then you sign this document!

They will NOT advance a loan to a small company unless the owner/director signs surety. I have asked them "so when you lend money to Anglo, do you get Oppenheimer to sign surety?" and all I get is a sheepish look.

The point is, you cannot do business without credit (even if it is just your credit card), and they will not give it without a surety!

Catch 22.


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Re: Lawyer - Surety

Unread post by HJK 414 » Fri Dec 21, 2018 10:33 am

Jack Welles wrote:
Wed Dec 19, 2018 11:08 am
HJK 414 wrote:
Wed Dec 19, 2018 10:48 am
Eddie, Just a short interlude, If a surety is signed to (co) guarantee repayment of a loan / debt .....
Once the loan / debt is paid in full - surely the surety (guarantee) automatically becomes void ?? JK
It depends on the wording of the surety (contract). IOW if it's very specifically limited to cover just that principal debt the answer would probably (there may be other terms in the surety that don't allow for this) be yes.

But IME sureties are normally worded exceptionally widely so as to cover every possible eventuality and that's why it depends on the wording.
.............

Eddie,

I owe you a bottle of white ......

I signed a guarantee for my son in law years ago (that was for his CPL etc) and that was paid back by him at least 3 years ago - no outstanding debt.
I contacted the bank after your post and lo and behold - it it still active (for "eventualities" / according to the smarta$$ at the bank). I have been told to request a cancellation of the guarantee (I have done so yesterday via a befriended Notary here).

That means for everyone that has signed a guarantee or surety - make sure it is cancelled !!
In this case - If Chris had caused a problem - I would have still been on the hook for it, despite the original "surety /guarantee" being for a loan having been paid up years ago........ :?

JK
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Re: Lawyer - Surety

Unread post by crash » Sun Dec 23, 2018 4:39 pm

It is ridiculous,

I paid that financing / loan off years ago
Yet the old man is still "preserved" as a guarantor for eventualities ....... #-o
I think that is really wrong.

Just imagine ....
What if I had caused a crash / accident - possibly a pax deceased / hurt / disabled and his estate sue's me ?
Would the old man then also be liable for any obligations that I incur ?
Ridiculous.

Being sorted - thank you mr Eddie

.
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Re: Lawyer - Surety

Unread post by Jack Welles » Sun Dec 23, 2018 7:31 pm

crash wrote:
Sun Dec 23, 2018 4:39 pm
Just imagine ....
What if I had caused a crash / accident - possibly a pax deceased / hurt / disabled and his estate sue's me ?
Would the old man then also be liable for any obligations that I incur ?
Ridiculous.

Being sorted - thank you mr Eddie
Glad it's sorted. Not good to leave these contingent liabilities floating around. Like the "mr". Avcom reaching new heights of politeness :lol:

In response to your question, if the surety to which you referred was entered into to cover a bank loan then the liability would have been restricted to defaults on borrowings from the bank. It would not have covered damages claims by third parties in the event of a crash/accident.
Jack Welles (thriller_author pen name)
https://www.amazon.com/Jack-Welles/e/B073VJQTTX
Eddie Haynes-Smart
Textbook - "The Lore of Negotiation"
http://www.loreofnegotiation.com
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Re: Lawyer - Surety

Unread post by cakesmasher » Sun Dec 30, 2018 8:05 am

Jack Welles wrote:
Wed Dec 19, 2018 10:38 am
Just for starters you need to be able to answer a few questions:

1) What is the actual wording in the surety itself? Bear in mind that it is a contract.

2) Was it entered into before the NCA came into effect?

3) Has the principal debt been extinguished?

4) What sort of leverage do you have with the relevant bank? IOW, are you perhaps a good client?

The answer to those questions will then lead you to the other (probable) questions that will have to be answered, which will eventually lead you to what you can do to cancel the surety.

Depending on the degree of exposure and the background, ie, the circumstances that now exists between you and your daughter, I would recommend that you go see an attorney to sort out the situation. This relates to the urgency that may now exist with regard to this matter.
Hi
Thanx, for all who posted.

1. See attached copy that I got from bank.
2. Not sure
3. Yes. Thats why i did not worry about the surety. I was under the impression once loan is paid surety expires.
4. Yes I do all my banking with Nedbank.

Regards
Gary
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Re: Lawyer - Surety

Unread post by Jack Welles » Sun Dec 30, 2018 9:50 am

cakesmasher wrote:
Sun Dec 30, 2018 8:05 am
1. See attached copy that I got from bank. Regards Gary
If that's the original you got back from the bank you're in the clear now and all the questions become irrelevant.

The rest was in case they refused to give it back to you (or claimed they couldn't find it) and then you would have had to take other steps.
Jack Welles (thriller_author pen name)
https://www.amazon.com/Jack-Welles/e/B073VJQTTX
Eddie Haynes-Smart
Textbook - "The Lore of Negotiation"
http://www.loreofnegotiation.com

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