A guaranty is a contract under which one person agrees to pay a debt or perform a duty if the other person who is bound to pay the debt or perform the duty fails to do so. A guaranty of the payment of a debt is different from a guaranty of the collection of the debt. A guaranty of payment is absolute while a guaranty of collection is conditional.
The Bexar Texas Guaranty of Collection of Promissory Note is a legally binding agreement that provides a third-party guarantee for the collection of a promissory note in Bexar County, Texas. A promissory note is a written promise to pay a certain amount of money by a specific date, and the guaranty ensures that the creditor will receive the owed amount even if the debtor defaults on the note. This Guaranty of Collection serves to protect the creditor's interests by establishing a secondary source of payment in case of borrower default. It is commonly used in various financial transactions, such as loans, mortgages, and business agreements, where a person or entity is willing to provide assurance that they will pay the outstanding debt if the primary borrower fails to do so. Key elements included in the Bexar Texas Guaranty of Collection of Promissory Note are: 1. Parties Involved: This agreement typically involves three parties: the debtor (borrower), the creditor (lender), and the guarantor. The guarantor is an individual or entity that agrees to be responsible for the payment of the debt should the debtor be unable to fulfill their obligations. 2. Guarantee Provision: The guarantor guarantees the payment of the promissory note, acknowledging that they will pay the outstanding amount if the debtor defaults. This provision outlines the precise terms, conditions, and limitations of the guarantor's responsibility. 3. Governing Law: The agreement states that it is subject to and governed by the laws of the state of Texas and specifically Bexar County, ensuring compliance with local regulations. Types of Bexar Texas Guaranty of Collection of Promissory Note: 1. Limited Guaranty: In this type of guaranty, the liability of the guarantor is limited to a specific amount or portion of the outstanding balance. It might also have a set expiration date or termination clause based on certain events or conditions. 2. Unconditional Guaranty: As the name suggests, an unconditional guaranty holds the guarantor fully responsible for the complete repayment of the debt, irrespective of any limitations or conditions. This type of guaranty is more comprehensive and offers a greater level of security to the creditor. 3. Continuing Guaranty: A continuing guaranty remains in effect until a specified event or condition occurs, such as full repayment of the promissory note. It covers all the existing and future obligations between the debtor and creditor, ensuring long-term protection for the creditor. 4. Limited Recourse Guaranty: This type of guaranty limits the creditor's recourse against the guarantor to specified assets or collateral, providing the guarantor with some protection against personal liability. It is important to note that specific language, terms, and conditions may vary within Bexar Texas Guaranty of Collection of Promissory Note agreements. To ensure their enforceability and alignment with individual circumstances, it is advisable to consult with a legal professional or attorney experienced in debt agreements and these types of guarantees.
