Mark Perez signs a standard form guarantee for a $60,000 loan his brother Fred gets from a bank. Fred later incurs a credit card debt to the Bank for a further $4,500. Fred also later guarantees a loan of $5,000 from the bank to his wife, who goes bankrupt. Fred pays back $30,000 on his loan and then goes bankrupt. For what principal amount is Mark liable as a result of the guarantee?

Question

Quizplus · Accepted Answer

Mark is liable for the $60,000 loan he guaranteed for his brother, plus the $4,500 credit card debt, and the $5,000 loan he guaranteed for his brother's wife. Fred paid back $30,000 on his loan, so Mark is liable for the remaining $30,000 + $4,500 + $5,000 = $39,500.

Mark Perez Signs a Standard Form Guarantee for a $60,000