Question

Nate and Ed are brothers. They agree to act as guarantors on a loan made by their sister, Deb. Deb defaults on the payments and Nate refuses to pay. Ed pays the debt. Ed can recover from Selected Answer:

A. liability

B. Nate and Deb under the right of reimbursement.

C. Nate Contribution, Deb subrogation

D.

Answer 1

In case of any default made by the borrower, the guarantor is liable to pay the amount. However the guarantor has a right to recover the amount from the borrower which Is called as subrogation wherein the guarantor can recover the amount paid by him due to the default of borrower.

Also where there are joint guarantor then it is the liability of both the guarantor equally to pay off the default amount. Meanwhile if any of the guarantor refuses to pay then the other guarantor is required to pay the whole amount and has a right to recover the other guarantor's contribution.

Therefore Ed can recover Nate contribution and Deb subrogation.

So the correct option is C