A guaranty is an undertaking on the part of one person (the guarantor) that is collateral to an obligation of another person (the debtor or obligor), and which binds the guarantor to performance of the obligation in the event of default by the debtor or obligor.
The contract of guaranty may be absolute or it may be conditional. An absolute guaranty is a contract by which the guarantor has promised that if the debtor does not perform the obligation or obligations, the guarantor will perform some act (such as the payment of money) to or for the benefit of the creditor.
A line of credit is an arrangement in which a lender extends a specified amount of credit to borrower for a specified time period.
A New Mexico Absolute Guaranty of Payment in Consideration of Extension of a Line of Credit is a legally binding agreement made between a lender and a guarantor in the state of New Mexico. This agreement provides an assurance to the lender that the guarantor will be responsible for repaying the outstanding debt on behalf of the borrower in case of default. Keywords: — New Mexico: This indicates that the guaranty is specific to the state of New Mexico and is governed by the laws of the state. — Absolute Guaranty: This specifies that the guarantor's obligation is absolute and unconditional, irrespective of any defenses, claims, or rights the borrower may possess. — Payment: Highlights that the guaranty is related to payment obligations and underscores the guarantor's responsibility to ensure the repayment of the debt. — Consideration: Emphasizes that the guaranty is given in exchange for the extension of a line of credit, implying that the lender is providing credit to the borrower based on this agreement. — Extension of a Line of Credit: Indicates that the guaranty is associated with the granting of additional credit to the borrower beyond their existing credit limit. Different types of New Mexico Absolute Guaranty of Payment in Consideration of Extension of a Line of Credit can include: 1. Personal Guaranty: In this type, an individual assumes the responsibility for the repayment of the debt incurred by the borrower. 2. Corporate Guaranty: In this case, a corporation guarantees the repayment of the line of credit granted to a borrower. This type of guaranty may require the involvement of shareholders or the board of directors. 3. Limited Guaranty: This type limits the liability of the guarantor to a specified amount or period, providing some level of protection to the guarantor. 4. Continuing Guaranty: This guarantee remains in effect until the line of credit agreement is terminated or revoked by either party. It covers any future loans or extensions of credit made under the same agreement. 5. Joint and Several guaranties: This form of guaranty holds each guarantor individually responsible for the entire debt, enabling the lender to seek full repayment from any or all of the guarantors. It's important to note that the specific terms and conditions of a New Mexico Absolute Guaranty of Payment in Consideration of Extension of a Line of Credit can vary depending on the parties involved, the amount of credit, and the overall agreement. Consulting with a legal professional is advised to ensure compliance with local laws and to draft an appropriate agreement.
