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Debtors may also transfer their debt and can do so by entering into a 'guarantee' agreement with another party. A guarantee is a contract whereby one person ('the guarantor') agrees to be responsible for the debts, or a particular debt, of someone else. This responsibility will always be specifically to the original creditor and is a contractual relationship, i.e. the guarantor has a contractual duty to stand in the shoes of the debtor. So, if there is a guarantee agreement, you can recover your money from the guarantor.
The guarantor will have a personal liability to the creditor if the debtor doesn't pay his debts that the guarantor guaranteed. The liability of the guarantor is in addition to, not in substitution for, that of the debtor. This does not mean that the creditor can ask for double his money, only that he is entitled to seek the entire sum, or any portion of it from either the debtor or guarantor.
By section 4 of the Statute of Frauds 1677 a guarantee is unenforceable unless it is made in writing (or there is a written memorandum or note of it) and the guarantor signs it.
A power of attorney to collect debts is used by one person, called the donor, to give another, called the attorney, the power to act on their behalf, specifically to collect the donor's debts. However, it cannot be used to perform any function in respect of property or an asset where the donor is a co-owner. In such cases a trustee power must be used.
The law states that the donor must execute the document creating the power of attorney as a deed. Traditionally a deed was a document that was signed, sealed and delivered. It is now no longer necessary to seal a document. If the document is signed and dated by the donor and the language clearly indicates that the document is signed as a deed, delivery is not required. Otherwise, it will not be treated as a power of attorney. At least one witness must also sign the document. The formalities required to execute the power of attorney are slightly different when signing on behalf of a company, in other words, if you want to appoint someone as your company's attorney.
Where a person gives a power of attorney and subsequently becomes mentally ill so that they are incapable of managing their affairs, the power of attorney will automatically be brought to an end. Anything done subsequently under the power of attorney will not be valid. It's worth mentioning that there is a special power of attorney which can be drawn up to deal with this situation, known as an enduring power of attorney.
To prove that a person has been given a power of attorney, they will either produce the original or else a certified copy of the original. Photocopying the original power of attorney and certifying that it is a true copy of the original makes a certified copy. Photocopying can include any other means of duplicating the original power of attorney.
The copy must be certified as being a true and complete copy of the original. If the copy consists of more than one page, write on each page of the copy the words 'This is a true and complete copy of the corresponding page of the original'. If the copy consists of one page, write on the page the words 'This is a true and complete copy of the original'. The donor should sign the certificate but if they are not available for any reason, a solicitor can do so.
If you are dealing with an attorney you should always ensure:
