Guarantor system in Japan “Rentai-Hoshou-Nin” (1)
Guarantor system in Japan “Rentai-Hoshou-Nin” (2)
“Rentai-Hoshou-Nin” means joint and several guarantor. (Simple “Hoshou-Nin” means guarantor.) There is a big problem with the term several, but I will explain it later.
I wrote about the term “several’ on the previous post. So, what will “several” gurantee mean?
1) When you simply guarantee (“Hoshou-Nin”)
When you simply guarantee somebody’s debt (let’s say 100,000JPY), and if that somebody (the main debtor) found another person to guarantee his debt, so there are 2 guarantors including you, then the amount you will have to pay will be 1/2 (50,000JPY). If there are 4 guarantors, you will just have to pay 1/4 (25,000JPY). This kind of simple guarantor is called simply “Hoshou-Nin” in Japanese.
Also, if the creditor comes to you and says “Pay the money you’ve guaranteed!”, you can say “The main debtor has money in his bank, so please go to him first”. Then, the creditor will first have to go to the main debtor.
2) When you become “Rentai-Hoshou-Nin”
But if you become “Rentai-Hoshou-Nin”, it won’t be like this. No matter how many guarantors there are, you will be responsible to pay the full amount (100,000JPY).
Also, even if the creditor comes to you from the beginning, you can’t say “Go to the main debtor”. The creditor can charge you from the first time.
This will be very important. Here’s an example.
- You become “Rentai-Hoshou-Nin” when somebody (the main debtor) rents a house in Japan.
- The main debtor didn’t pay his rental money for 1 year.
- The main debtor goes back to his country without paying.
- The house owner comes to you and says “Pay the unpaid rental money”.
In this case, you will have to pay the full amount. Even if the main debtor has a good job in his own country, and he seems to have a lot of money in his bank account, you can’t say “Please charge him first”. You will have to pay the money yourself, and then, you will have to find the main debtor and say “Pay me the money I paid in place of you”. This can be very difficult when the main debtor has gone away from Japan.
3) I am not saying that you should never become a “Rentai-Hoshou-Nin”. In some cases you yourself may need to ask your friend to become your “Rentai-Hoshou-Nin”. But once you become one, you should be very careful if the main debtor is paying his monthly money, and if the main debtor isn’t paying, make solid contact with both the main debtor and the creditor to resolve the situation. You may sometimes have to persuade the main debtor to terminate the lease and leave the house as soon as he can.
Don’t forget, when you become a “Rentai-Hoshou-Nin”, you should be very careful from beginning to end, which is, until the main debtor completes all his paying (if the case is about house rental, you should also confirm that the main debtor has actually left the house).