One who agrees to be liable for the debt of another, sometimes described as a “fool with a pen.”

A guarantor who pays a debt validly owed by a debtor in bankruptcy is in most instances subrogated to the rights that the creditor has against the debtor to the extent of such payment unless the guarantor has some other right of reimbursement.

The Code makes it clear that the discharge of a debtor in a Chapter 7 or Chapter 11 case does not have the effect of discharging the obligations of a guarantor, yet plan proponents frequently seek discharges (or the equivalent in the form of permanent injunctions) in favor of guarantors in their plans.

Bankruptcy Code §§ 509, 524(e). See also Co-Debtor, Co-Obligor, Subrogation Rights.

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