Trustees and Deed of Exoneration
The deed of exoneration looks at a loan and the principal borrower’s assets when they enter bankruptcy. The principal receives the direct benefits of the loan. The parties’ intentions and roles in the loan are analysed.
The deed of exoneration applies in situations such as a shared property where a loan was taken by some owners but all owners have agreed. If the principal borrower has entered bankruptcy, the other owners, sureties, are responsible for the shortfall in repayment.