PERSONAL

CONTINUING
GUARANTY

W hat is G uaranty in general?

Under the New Civil Code, by
guaranty, a person called the
guarantor, binds himself to the
creditor to fulfill the obligation of
the principal debtor in case the
latter should fail to do so.

Classifi
cation ofG uaranty:
1. Personal -The guaranty given

is the credit of a person who

guarantees the fulfillment of
the principal obligation.
2. Real - The guaranty given is
property, movable or
immovable.

PERSO N AL G U ARAN TY
In its broad sense, it is where a third
party
guarantees
the
financial
obligations of a person under a contract.
In lending, a Personal Guaranty is a
guaranty in which an individual agrees to
be
responsible
for
the
financial
obligations of a debtor or borrower to a
lender, in the event that the debtor or
borrower fails to pay an amount owing
under the loan agreement.

PERSO N AL CO N TIN U IN G
GU
ARAN
TY
A guaranty relating to a future
liability of the principal, under
successive transactions, which
either continue his liability or
from time to time renew it after
it as been satisfied.

A Personal Continuing Guaranty

is
an
agreement
by
a
guarantor to be liable for the
obligations of someone else to
the lender, even if there are
several different obligations
that are made, renewed or
repaid over time.
In contrast, a Specific Guaranty
is limited only to one individual

Under a Continuing Guaranty

Agreement,
the
guarantor
agrees to back up everything
the borrower owes to the
lender, no matter how many
notes
or
transactions
are
involved.
This agreement is unlimited
in amount, which means that
there is no cap on the amount

No matter how much

money
the
borrower
borrows, the guarantor is
promising to repay those
amounts if the borrower
doesn't.