Am I liable for Finance
My father bought a property in my name but signed surety on finance of the property so it is bonded and I think there is an outstanding amount of plus minus R200 000. If he doesnt make payment can the bank come after me? also I am in the process of getting my own property and was wondering if the bank may try to come after that.
Hi Nathania. Surety means if the principal debtor does not pay or defaults, the bank can sue both. If one pays, the other is absolved.
You are the principal debtor and your father is the surety. In effect you are the one liable for the debt, and your father guarantees that it will be paid.
If full payment of the debt is not made according to the bond agreement both of you can be sued.
With property the banks recover their money by going to court to be given the right to sell the property to recover the debt. If there is an outstanding balance after sale they can technically go after any other assets you and your father possess that is unencumbered ( not bonded ).That rarely happens though.
An outstanding balance of 200 000 will almost surely be recovered from a sale of the property if things go bad. Depends on the value of the property though.