Siddartha S. Karnani Highlights Risks Faced by Loan Guarantors in Debt Recovery
In a recent article published by Business Standard, Siddartha S. Karnani shared key insights into the legal and financial risks faced by loan guarantors, emphasizing the importance of informed decision-making in loan transactions.
Highlighting the realities of debt recovery proceedings, he noted that lenders are empowered to proceed against assets pledged by guarantors. These may include immovable property, pledged financial instruments, and other assets specifically charged to secure the loan. He further pointed out that banks may also recover dues by utilizing funds available in guarantors’ bank accounts.
His remarks highlight the significant exposure that guarantors undertake often without fully understanding the scope of their liability. The insights serve as a timely reminder for individuals and businesses to exercise due diligence and proactively negotiate safeguards, such as caps on liability, within loan agreements.
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