Q. At what point can the lender turn to the guarantor to collect from him?
A. The lender must sue the borrower first, even if he does not have known assets. Only after establishing that he has no assets can the lender turn to the guarantor. Regarding an arev kablan, who accepts direct liability, the lender can turn immediately to the guarantor, even if the borrower has assets, unless the borrower wants to pay (C.M. 129:8,15).
If collecting from the borrower entails significant expenses that would detract from the repayment — e.g., his assets are in a distant land — the lender can collect from the guarantor (C.M. 129:11).
When the borrower is not present, the lender cannot collect from the guarantor without a loan document, since perhaps the borrower repaid. Even if the lender holds a loan document, the borrower should be notified first, if it is reasonably possible to contact him (C.M. 129:10, 12).
The guarantor is not required to pay until 30 days after he becomes liable, even if he has available assets, unless initially stipulated otherwise (Shach 129:23).
Based on the writings of Rav Chaim Kohn, shlita. This article is intended for learning purposes and not to be relied upon halacha l’maaseh. There are also issues of dina d’malchusa to consider in actual cases.
Rabbi Meir Orlian is a faculty member of the Business Halacha Institute, which is headed by HaRav Chaim Kohn, shlita, a noted dayan. For questions regarding business halacha issues, or to bring a BHI lecturer to your business or shul, please call the confidential hotline at 877-845-8455 or e‑mail firstname.lastname@example.org. To receive BHI’s free newsletter, Business Weekly, send an e‑mail to email@example.com.