A lender who is unsure whether a debtor will have sufficient income or assets to repay a loan may require another person to guarantee payment.If the borrower fails to repay the loan,that person is responsible for paying it.This responsibility is called trusteeship.

Question

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This responsibility is called a guarantor or co-signer agreement, not trusteeship. Trusteeship involves managing assets on behalf of another person.

A Lender Who Is Unsure Whether a Debtor Will Have