What Are you a joint and several debtor? What are the implications and how can you get out of this situation?

If you've ever needed to understand your responsibilities in a shared debt, the term "joint and several debtor" may have come up. Perhaps you're going through a time when the person you shared a financial obligation with isn't fulfilling their part, or you've been surprised by an unexpected charge. These situations are more common than they seem and often raise many questions about who should be responsible for the debt.

In this article, we'll explain in a simple and practical way what it means to be a joint debtor, how it works in practice, and what you need to know to protect your rights and organize yourself better. Understanding this issue is crucial for anyone involved in financing agreements, loans, or other forms of joint commitments.

You will find in this text

• What is a joint and several debtor?
• How Does Solidarity Work in Practice?
• Difference between Joint and Several Debtor and Subsidiary Debtor
• What are the rights and duties of a joint and several debtor?
• What are the consequences of being a joint and several debtor?
• How to Get Out of a Joint Debtor Situation?

What is a joint and several debtor?

A joint and several debtor is a person who, along with others, assumes full responsibility for the payment of a debt. In a joint and several debt, all parties are equally liable for the full amount, regardless of who contracted or used the credit.

While there are different forms of liability for debts, such as subsidiary liability, in the case of joint liability, any of the debtors can be held liable for the entire debt. These differences will be explained in more detail later, but the important thing to understand is that, in a joint and several debt, everyone is equally liable, ensuring greater security for the creditor.

How Does Solidarity Work in Practice?

In practice, joint and several liability means that all parties to a debt are equally responsible for its payment. The creditor is free to choose which of the joint and several debtors to collect the full amount of the debt, without having to follow a specific order or attempt to collect from each party proportionally. In other words, any of the debtors can be forced to pay the entire debt, even if they have only assumed a portion of the obligation.

This mechanism facilitates credit recovery for the creditor, but requires attention from joint and several debtors, as each can be called upon at any time to pay the full amount.

Difference between Joint and Several Debtor and Subsidiary Debtor

The main difference between a joint and several debtor and a subsidiary debtor lies in how liability for the debt is distributed and collected. A joint and several debtor can be sued by the creditor at any time to pay the entire debt, without having to collect from other debtors first. A subsidiary debtor, on the other hand, will only be sued after the principal debtor defaults on their obligation.

In other words, in the case of joint and several debtors, the creditor can choose who to collect, as they all have the same liability. In the case of subsidiary debtors, the creditor must first attempt to collect from the principal debtor. Only if the principal debtor fails to pay can the subsidiary debtor be sued.

Comparative Table

What are the rights and duties of a joint and several debtor?

As a joint and several debtor, it's important to be aware of both your rights and your obligations. They are listed below in a clear and objective manner:

Rights

• Right of return: If you are the joint and several debtor who has been charged and paid the full amount of the debt, you have the right to demand reimbursement from the other debtors of the shares that are due to each of them.
• Right to information: You have the right to be informed about any changes or negotiations involving the debt, such as new deadlines or payment conditions.
• Right to discuss debt: Even if you are a joint and several debtor, you have the right to question the amount of the debt or the terms of the contract, just like any other debtor.
• Right to division of debt in case of bankruptcy: In situations where other debtors go bankrupt, you can divide the liability according to each debtor's available assets.

Duties

• Full liability for the debt: You are equally responsible for the entire debt, even if you only owed part of it. This means you can be charged in full.
• Compliance with deadlines and conditions: It is your duty to ensure that payment deadlines are met, whether by you or through full payment.
• Pay attention to the contract: You should be aware of the terms of the contract and how the debt was structured, to avoid surprises at the time of possible collection.
• Accountability to other debtors: If you are the one making the full payment, you must notify the other debtors and request that each of them fulfill their part of the repayment.

What are the consequences of being a joint and several debtor?

Being a joint and several debtor has some important consequences that are crucial to understand. Below are the main impacts of this responsibility:

• Full debt collection: Any of the joint and several debtors may be charged for the full amount of the debt, even if they have agreed to pay only part of it.
• Risk of compromising one's own assets: If you are the joint and several debtor and are unable to pay, your personal assets may be used to settle the debt, depending on the type of contract and applicable laws.
• Impact on credit: Failure to pay a debt by any joint and several debtor may result in credit restrictions for all parties involved, even if you are not the one who failed to fulfill the obligation.
• Ongoing financial responsibility: Until the debt is fully paid off, all joint and several debtors remain obligated to pay, which may generate charges and interest if the debt is delayed.
• Possibility of return: If you are the only one paying the entire debt, you may have difficulty getting back what you paid for other debtors, especially if they are in financial trouble.
• Relationship of trust affected: Often, failure to fulfill debts by other joint and several debtors can affect personal or professional relationships between the parties involved, causing conflicts.

How to Get Out of a Joint Debtor Situation?

If you find yourself in a joint and several liability situation and want to know how to free yourself from this liability, it's important to take some steps with caution and planning. Below is a path to escape this situation:

1. Pay off the debt: The most direct and definitive way to get out of a joint and several liability situation is to pay off the debt. This ends the commitment and releases all parties involved. If you pay in full, you can seek reimbursement from the other parties.
2. Negotiate with the creditor: If paying off the debt isn't an immediate option, try negotiating with the creditor a way to replace or release your liability. In some cases, the creditor may agree to remove your name from the agreement if there are guarantees that the other debtors will honor their commitment.
3. Make an agreement with the other debtors: Talk to the other parties involved to restructure the debt or even negotiate who will be responsible for certain installments. If possible, formalize a new agreement between the parties and present it to the creditor.
4. Legal action for sharing of responsibility: If there's no agreement between the debtors or the creditor, you can seek a judicial solution. The court can determine the division of the debt between the debtors, based on each person's ability to pay.
5. Avoid new joint and several liabilities: After settling a joint debt, think carefully before taking on new commitments of this type. Carefully assess the risks and ensure that everyone involved is able to fulfill their obligations.

Getting out of these situations can help ease the burden of being a joint debtor, and with planning, you can avoid similar situations in the future. Shared financial responsibility requires trust and clarity in decision-making, so it's always important to be well-informed and make informed decisions.