How to calculate a cosurety amount?
A cosurety is a term that used when there are two or more sureties that are under the same obligation and may be jointly and severally liable. The visual below illustrates the formula that can be used to calculate the liability of each surety:
Below is an example of a cosurety calculation:
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What is the difference between a surety and guarantor?
One of the key factors to note about the concept of surety, is that in a suretyship agreement, the representing surety will have no rights against the creditor. Thus, if the debtor defaults on a loan, the creditor will have the right to demand payment from the surety. In order for a suretyship agreement to […]
Are contracts involving suretyship required to be in writing?
Yes. Surety contracts fall under the statute of frauds and must be in writing. Surety arrangements are when one party agrees to pay off the debt of another. The surety promise will be made with the original credit who has agreed to loan the money to the original debtor. Below is an example of surety […]