They asked you to make a bank surety but don’t know what it is?
Wondering what the surety is is normal, especially if it is the first time you are faced with such a request.
So what is bank guarantee?
A surety contract requires that a person (the guarantor) guarantees with his own assets the fulfillment of a contractual obligation assumed by another person.
This is the specific definition of a guarantee fideiussoria, but let’s see exactly how it works and when it is requested or is proved necessary.
What does the bank surety mean
The bank guarantee is an insurance or rather a personal guarantee that binds the debtor and his guarantor to correspond to what is due to his creditor. So this sees three main subjects interested: the debtor, the creditor and the guarantor (guarantor).
Through the bank guarantee, therefore, the creditor has the guarantee that whatever may happen to the debtor there will be a third figure who will assume the burden of the debt contracted, in this case the third figure is the bank.
A situation in which you are faced with the request for a contract of this type is the bank guarantee for rent. In this case, the guarantee is claimed by the owner of the property, while the guarantor becomes the bank, who fulfills the task of paying the rent if the debtor does not.
Of course, the bank will then rely on the debtor to be able to obtain the sums made up to the creditor.
The various forms of surety are regulated by Article 1936 of the Italian Civil Code, as described by the law: the guarantor personally obliges himself with the creditor and guarantees the fulfillment of a bond of others.
Bank Fideiussione: How It Works
How does the bank surety work? The guarantee contract as we have seen can take place between three specific subjects the debtor, the creditor and the guarantor.
In banking, we need to consider two types of surety:
- Solidale: this contract is stipulated between two banks that undertake to acquit the debts assumed by the contractor. This option usually provides for a maximum spending ceiling, within which the guarantor has no obligation to intervene.
- With the benefit of ecussion: this contract provides that the creditor before turning to the guarantor, turns to the debtor for the payment of the debt. Therefore, it must first provide for a forced execution of the assets of the principal debtor, only if they are not sufficient to cover the debt, the guarantor will intervene to cover the remaining part of the debt.
In both cases there is a bank surety cost to consider, and this is always paid by the debtor. So the debtor must put a sum per guarantee, he must pay the fees and of course the cost of the policy.
Usually a guarantee policy provides a fee of 1% while interest rates are between 0.75% at 3% per month depending on the type of surety required of the bank.
For example, if you pay the lease and rent is charged, the debtor must pay the bank.
Banking Fideiussione: How to get it
To obtain a bank guarantee, the procedures may vary slightly depending on the credit institution to which you turn. Although some documents may vary in general we can consider those that you will surely need if you make the request as a private citizen:
- CUD or Last Tax Return
- Last two paychecks
- Photocopy of identity documents
- Contract with the creditor on which the surety is based
- Contract of lact (in case you require for this)
In the event that you are requesting the surety as a legal person, so if you have a company, a company or you have a unipersonal srl, the documents to be presented are:
- Unique ins of the administrator’s income and any members
- Budget of the company
- Copy of the Camerale Visura
- Contract on which the required guarantee is based
- Identity document of the applicant
Once all the documents are brought, the bank will make a surety contract and communicate the costs and conditions to which the debtor must submit.
When does the surety decay?
The Decline of This Binding contract is ordered in accordance with the rules in the Civil Code. This defines that the bank guarantee lasts for as long as the bond is expected to be the duration of the bond, i.e. Debt for which the guarantee was made.
The moment the debt is paid, then the bank guarantee ceases. Once the guarantee contract has been terminated, if the debtor has not paid his debt, the creditor may request the payer to the guarantor.
The bank guarantee also expires if the debtor repays the creditor before the end of the terms of the contract.
The guarantee can also be extinguished for reasons that, for example, directly concern it; these are the same for which another obligation can also be extinguished, therefore they include all the general and special causes dictated in the guarantee contract.
The civil code, however, provides for three hypotheses of extinction of the surety:
1) When the obligation to be sure for the creditor cannot take effect the surrogacy of the guarantor, in the pledge, rights and mortgages or privileges;
2) When it comes to a surety for a future bond, and the creditor has made credit to the main debtor without special authorization of the guarantor, therefore the personal conditions of these have become such that it is difficult to satisfy the claim;
(3) When the creditor has not proposed the applications against the debtor within the six months provided for after the expiry of the obligation. This period can be reduced to two months when the guarantor has limited his obligation to the same term as the main one.
Finally, a cause of the extinction of the surety is led to the non-observance of the debtor’s honor of the debtor.
How to withdraw the guarantee contract
The withdrawal of the surety contract is an act through which a person can possibly proceed to revoke the guarantee that has been stipulated previously.
The withdrawal from the sureties are legitimate and provided only in the event that it is proven, by the creditor, an intentional and totally inappropriate culpable conduct.
These behaviors lead to the termination of the contract and the bank enters into the right to request the sums due directly to the debtor.
In the event of a revocation of the guarantee, the institution or the financial institution that granted it is in any case responsible for the debtor, and also for the commitments established between the debtor and the creditor during the moment the deposit is waived.
Finally, the debtor (if he has paid the amount due up to that time) can also request withdrawal from the surety, asking for the release of the bank that granted it and communicating this decision to the creditor, who must agree to its termination.
In any case, to start a practice of withdrawal of the guarantee, the intending subject must follow a precise bureaucratic process, make the withdrawal active and communicate this purpose through the sending of a completed model for the withdrawal of the surety, to be sent by registered letter with return receipt.
