§ 6-9. Release period: the guarantor's right to pay early

The guarantor does not have to wait for the lender to make a claim. If the borrower has defaulted on the credit agreement to a not insignificant extent, or there is reason to assume such default is coming, the guarantor can pay off all or part of the liability. He can then put an end to it himself. He must notify both the lender and the borrower of when the payment will be made.

Notice may be dispensed with in some situations. The lender may have taken legal action against the borrower under § 6-10, or told the guarantor that this will happen. The guarantor then does not need to give notice of the payment. The same applies when the borrower has started debt negotiations, has applied to the enforcement officer for debt negotiations under the Debt Settlement Act, or has been declared bankrupt.

When the guarantor pays, he takes over, in accordance with general rules, the lender's position in the credit agreement and in the security provided for the claim. The lender can stop this by releasing the guarantor from liability to the same extent as the payment would have freed him from.

The lender cannot make a claim against the guarantor until the conditions in § 6-10 are met. The release period gives the guarantor a way out of the waiting. Under § 6-13, the guarantor can claim payment from the borrower to the extent he is liable to the lender. § 6-7 and § 6-8 govern how the liability is reduced by payments and debt insurance, and § 6-12 governs who bears the costs of legal debt collection.

Example: The borrower has defaulted on a significant part of the loan. The guarantor notifies the lender and the borrower that he will pay, pays, and then takes over the credit agreement and the security. The lender can instead release the guarantor from liability to the same extent.