THE CREDITOR’S FAULT - MEANS OF EXTINCTING THE SURETYSHIP; SPECIAL FEATURES WITHIN THE BANKRUPTCY PROCEEDINGS

A specific means of extincting a suretyship is constituted by the creditor’ act, in this case the bank, which allowed the loss of the rights and securities he had against the principal debtor and in which the surety was going to subrogate.The fault of the bank according to the analyzed case-law is that the bankruptcy procedure for the principal debtor was already opened and thus he was too late in lodging claims and did not gain the statute of creditor entitled to participate to the bankruptcy proceedings.The surety’s right of recourse against the principal debtor, through subrogation, in order to obtain from him the repayment of the amounts paid to the bank-creditor comes in conflict with the creditor’s act. Following the non-registration of the bank on the statement of assets and liabilities of the debtor undergoing bankruptcy, the surety is deprived of the possibility to legally subrogate to his rights and securities.The extinction of the suretyship consequently acts as sanction for the bank that allowed the loss of the rights and securities it had against the principal debtor and blocked the surety’s possibility to exercise the right of recourse and subrogate to the rights of the bank to recover from the bankrupt debtor the amounts paid to the creditor.