DEBT MANAGEMENT
Loan guarantors: rights, risks and realistic remedies
· 6 min read · Georgios F. Dionysiou
The guarantor is often the 'invisible' borrower: they didn't receive the money, but inherit the debt when the primary borrower stops paying. The law provides protection tools — but only if you know them and activate them in time.
What 'co-debtor' and 'guarantor' mean
A guarantor is equally liable with the primary borrower for debt repayment (simple guarantee), while a co-debtor is liable as a debtor. The practical difference is significant: the guarantor can in certain cases raise the types of liability provided by the Civil Code, while the co-debtor is treated as the primary debtor.
Often-ignored risks
- Seizures of salaries, pensions and bank accounts.
- Auction of mortgaged property.
- Inclusion in credit bureaus (Tiresias) with consequences for future borrowing.
- Parallel pursuit of guarantor and primary borrower — double pressure.
What you can claim
You're not helpless. If the bank didn't follow the guarantee formation terms, if you weren't properly informed about currency risk (in foreign currency loans), or if the primary borrower's debts had already prescribed, there may be well-founded legal arguments.
Additionally, a guarantor who pays acquires a recourse claim against the primary debtor — meaning they can claim back the amounts they paid.
Realistic arrangements
- Negotiation with the bank or servicer to settle the debt in affordable installments.
- Inclusion in the out-of-court mechanism (Law 4738/2020), when conditions are met.
- Mediation for an agreement that protects property and income.
- Audit of the original guarantee contract for abusive terms or deficiencies.
When you're released
A guarantee can be revoked by express agreement, declared void if well-founded legal arguments exist (e.g. diminished capacity, abusive terms), or the claim against the guarantor may prescribe according to the Civil Code limitation periods. Release is not automatic — it requires activation and documentation.
Sources & legislation
Disclaimer — this article is for informational purposes only and does not constitute, nor can it replace, personalized legal, financial or tax advice. The legislation, ministerial decisions, amounts and criteria mentioned may have been amended or repealed after the date of publication; all information must be verified against current provisions (Official Gazette, gov.gr) at the time you make a decision. The outcome of each case depends on its specific factual and legal circumstances, the fund or authority involved, and the applicable provisions at the time. Before deciding or acting on any point in this text, seek a personal assessment from a qualified professional who will examine your own case.