Click "Create Document" button and the document will be prepared with your account details automatically filled in.
Please fill in any additional information by following the step-by-step guide on the left hand side of the preview document and click the "Next" button.
When you are done, click the "Get Document" button and you can download the document in Word or PDF format.
Please review the document carefully and make any final modifications to ensure that the details are correct before sending to the addressee.
The document titled 'Demand Letter to Guarantor' is a formal letter addressed to a guarantor who has agreed to pay on demand all sums of money owing to the bank by the borrowers. The purpose of this letter is to inform the guarantor that the borrowers have failed to make repayment of the indebtedness to the bank, and as a result, the guarantor is now liable to pay the outstanding amount.
The letter begins with the identification of the parties involved, including the name and address of the guarantor, the current date, and the name of the bank. It then explains the existence of a guarantee executed by the guarantor and others in favor of the bank, which covers the liabilities of the borrowers. The guarantor's unconditional and irrevocable agreement to pay all sums of money owing to the bank is emphasized.
The letter further states that the borrowers have breached their repayment obligations by failing to make timely repayments. The current outstanding amount owed by the borrowers to the bank is specified, along with the relevant details. The guarantor is reminded of their liability to pay this amount, along with further interest at a specified rate.
A demand for immediate payment is made to the guarantor, with a clear deadline provided. It is emphasized that failure to make the payment in full by the deadline will result in the initiation of legal proceedings against the guarantor without further notice. In such circumstances, the guarantor will also be responsible for all the legal costs, charges, and expenses incurred by the bank for the enforcement of its rights under the guarantee.
The letter concludes by reserving all the rights and remedies of the bank and is signed off by the name of the party representing the bank.
To effectively use the 'Demand Letter to Guarantor' document, follow these steps:
1. Identify the parties: Fill in the name and address of the guarantor in the designated fields. Ensure that the current date is accurately stated.
2. Understand the guarantee: Familiarize yourself with the guarantee executed by the guarantor and others in favor of the bank. Ensure that you are aware of the guarantor's unconditional and irrevocable agreement to pay all sums of money owing to the bank.
3. Assess the borrowers' breach: Determine whether the borrowers have failed to make timely repayments, thereby breaching their repayment obligations. Gather all relevant information regarding the outstanding amount owed by the borrowers to the bank.
4. Calculate the payment amount: Calculate the total amount owed by the borrowers, including any interest at the specified rate. This will be the amount demanded from the guarantor.
5. Set a deadline for payment: Determine a reasonable deadline by which the guarantor must make the payment in full. Ensure that the deadline allows sufficient time for the guarantor to comply.
6. Communicate the demand: Send the demand letter to the guarantor, either by mail or electronically. Clearly state the demand for immediate payment of the specified amount, along with the consequences of non-payment.
7. Monitor the response: Keep track of the guarantor's response and actions. If the payment is not received by the deadline, be prepared to initiate legal proceedings against the guarantor.
8. Seek legal advice if necessary: If the guarantor fails to comply with the demand or disputes their liability, consider seeking legal advice to understand your rights and options for enforcing the guarantee.
By following these steps, you can effectively utilize the 'Demand Letter to Guarantor' document to demand payment from a guarantor who has agreed to pay on demand all sums of money owing to the bank by the borrowers.