What is the difference between a joint and several guarantor (“fiador solidario”) and a guarantor (“avalista”)?

Question

José Manuel Alburquerque · Accepted Answer

In practice, “avalista” and “fiador” are used as synonyms. Both refer to the person who undertakes to pay someone else's debt if that person does not pay. The difference that matters lies not in the name but in whether liability is ordinary or joint and several. An ordinary guarantor can require that an attempt be made first to recover the debt from the debtor, whereas the whole amount can be claimed directly from a joint and several guarantor. A guarantor can be one or the other depending on what they sign, although in bank loans they almost always sign as joint and several guarantors. “Avalista” and “fiador” The law speaks of the “fiador” (surety) and the “fianza” (suretyship). Strictly speaking, an “avalista” is someone who signs the “aval”, the guarantee, on a bill of exchange or a promissory note. But in everyday usage and in bank and tenancy agreements “avalista” and “fiador” mean the same thing. The rules that apply are those on suretyship in the Spanish Civil Code (“Código civil”), which also govern in Catalonia because the “Código Civil de Cataluña”, the Catalan Civil Code, does not regulate this matter. A bank guarantee is a different matter, as the party liable is a bank. It is usually given on first demand, that is, the bank pays as soon as it is asked to, without going into whether the debt exists. Ordinary or joint and several What changes the guarantor's position is whether they bound themselves on an ordinary or on a joint and several basis: An ordinary guarantor can require the creditor to seek payment from the debtor's assets first, which is known as the benefit of discussion (“beneficio de excusión”), provided they ask for this as soon as payment is claimed from them and point out assets of the debtor in Spain that are sufficient. If there are several guarantors, each one is liable only for their own share, which is known as the benefit of division (“beneficio de división”). A joint and several guarantor does not have those benefits. The creditor can claim the entire debt from them directly, without first going to the debtor or the other guarantors. To find out which applies to you, check whether the document says that you are liable “solidariamente” (jointly and severally) or “como deudor principal” (as principal debtor) and whether you waive the benefits of “excusión, orden y división” (discussion, order and division). If it says the former, you are a joint and several guarantor even if the document calls you an “avalista”. If you only waive those benefits, technically you are not, but the practical result is very similar, because the whole amount can be claimed from you without first going against the debtor. Check also whether there is a limit on the amount or the duration. What a joint and several guarantor keeps Even though they are liable as if they were just another debtor, a joint and several guarantor is still guaranteeing someone else's debt. The law itself refers to sureties “aunque sean solidarios” (even if jointly and severally liable) when it sets out when they are released. That is why they keep the defences specific to suretyship: They can raise against the creditor anything that affects the debt itself, for example that it has already been paid or that the contract is void. They may be released if the creditor gives the debtor more time without their consent. Many loan agreements treat that consent as given in advance, so they need to be read. They are released if, because of something the creditor has done, they can no longer take the creditor's place in the securities for the debt, for example if the bank discharges the debtor's mortgage without having been paid. Whatever they pay, they can claim back in full from the debtor. Signing as a joint holder or co-borrower of the loan is a different matter. The debt is then also yours and not someone else's, so you do not have the defences specific to suretyship, such as being released if the bank gives more time without your consent. In addition, the loan appears in your name as your own debt in the Bank of Spain's “Central de Información de Riesgos”, the register of loans and guarantees that banks consult.