#SucceedingWithoutBleedingSeries #WorkplaceSurvival #BorrowingDecisions
#PRINCIPLE 2: Avoid Signing Surety on A Loan
A surety is the organization or person that assumes the responsibility of paying the debt in case the debtor policy defaults or is unable to make the payments. The party that guarantees the debt is referred to as the surety, or as the guarantor. – Investopedia.com
Creditors have the right to collect their money or recover whatever properties that have been pledged as surety/collateral. So when you endorse a note personally (personal surety), you pledge all your assets as collateral.
It’s important we get this: You sign as surety on the debts you incur without consciously realizing it.
For example: You’d think that the mortgage on your home is collateralize by the building itself but unfortunately it is not as it were. Although your home is pledged as collateral, you still need to personally guarantee it.
Here is the implication of that: should you be unable to honor your payment and the mortgage company forecloses and sells the property less than your outstanding debt, the mortgage company can sue you for the balance.
This same rationale goes for other assets. The bottomline is when you personally sign on a debit: as long as any portion of the debit exists, everything one owns is at risk.
TIMELESS presentation of Proverbs 6: 1-3 Advisory clearly explains it:
“My son, if you have become security for your neighbor, if you have given your pledge for a stranger or another: You are snared with the words of your lips, you are caught by the speech of your mouth. Do this now [at once and earnestly], my son, and deliver yourself when you have put yourself into the power of your neighbor; go, bestir and humble yourself, and beg your neighbor [to pay his debt and thereby release you]”
I’d see you tomorrow still talking #AvoidSigningSurety.
People | Insurance | Sustainable Value
#SucceedingWithoutBleedingSeries #Business-WorkPlaceSurvival #TBD
Have a Truly Rewarding 2015. Good morning!