I was guarantor of a person X for a commercial vehicle loan in 2011 for tenure of four years. Person X was well known to me and installments were up-to-date. The X is not paid the amount for two installments, financier seized the vehicle, and sold to Y. Financier neither informed me nor took my approval to sold the vehicle to Y who was unknown to me. After 2 months, financier approached me and asking me to pay the differential amount (Actual expected amount - actual sold amont). The financier is calling me for my time to sit and will and discuss. What can I do now?
1 Answer from Attorneys
Dear Sir / Madam,
Financier is not legally bound to inform you and take your approval prior to sale. As a guarantor, you remain responsible for settlement of the loan. You should confirm that the bank first actions recovery from the borrower from all his sources, and if there is still a shortfall, you should negotiate on a settlement with the financier.
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