Lesson: Surety Defenses

In this lesson, Nick Palazzolo, CPA, unpacks an array of defenses available to a surety when faced with potential liability for a debtor's obligation. He explains how creditor's fraud, duress, illegality, and even the debtor's bankruptcy can provide grounds for a surety to resist payment demands. Nick illustrates these defenses with hypothetical situations that make the concepts relatable and easier to grasp. He then continues by outlining scenarios where variations in the loan agreement or a gratuitous surety's status can alter or eliminate the surety's obligation. The lesson culminates in a discussion of what happens when there is a loss of security or when co-sureties are introduced into the equation, providing a practical understanding of the intricacies sureties face.