Q: I signed on a loan as one of two guarantors. Under what circumstances is the creditor allowed to seek payment from me?

A: A creditor may not collect from the guarantor before adjudicating with the debtor, even if he does not have known assets. If the debtor is away and unreachable, if he does not respond to the summons, or if beis din ascertains that he does not have assets to repay, then it is possible to turn to the guarantor (C.M. 129:8-11). However, if the creditor stipulated explicitly that he “can collect first,” from whomever he wants, he can turn to the guarantor directly even if the debtor has known assets (129:14).

Nowadays, there is generally a formal guarantee contract signed by the guarantor, stipulating the terms of the guarantee. There are also rules defining when the creditor can initiate proceedings against the guarantor. Any stipulated conditions are binding (129:13).

It is a great mitzvah to help another secure a loan. At the same time, it is important that a guarantor be aware of the legal terms of the guarantee and the extent of his liability. He should also be realistic about his ability to pay if the borrower should default for any expected or unexpected reason.