If you guarantee someone’s loan in the UAE, whether the bank must chase the borrower first now depends on when you signed and on one word in the document. Under Article 1009 of the Civil Transactions Law (Federal Decree-Law No. 25 of 2025), in force since 1 June 2026, a creditor may not proceed against the surety alone before proceeding against the debtor, and may not execute against the surety’s assets before exhausting the debtor’s, unless the surety is jointly liable with the debtor or the law or the agreement says otherwise. Guarantees signed before 1 June 2026 are governed by the old Article 1078, under which the creditor could simply pick its target. In practice that means the bank can go straight to the person with the salary transfer and the reachable address, which is usually the guarantor. The wider set of changes the new Code made, including the renumbering of the whole suretyship chapter, is covered in our guide to the UAE Civil Code replacement of 1 June 2026.

This guide covers what a guarantee actually creates under UAE law, the six-month rule that can discharge you entirely, what the Central Bank obliges a lender to disclose to you before you sign, what the cheques you hand over can and cannot be, what guaranteeing does to your own borrowing capacity, and how to recover from the borrower afterwards.

What a Guarantee Creates Under UAE Law

The Civil Transactions Law calls it suretyship, and Article 986 defines it as a contract by which a person joins their liability to that of the debtor in performing an obligation, undertaking to the creditor to discharge it if the debtor does not. It was Article 1056 of the 1985 Civil Code. You are not a backup. You are a second person liable for the same debt.

Two features of how a suretyship comes into existence surprise people. Article 987(2) provides that for a suretyship to arise and take effect, it is enough for the surety to make the offer, unless the obligee rejects it. The borrower’s agreement is not a formal element, and Article 988 confirms a debtor may be guaranteed without their knowledge and even over their objection. Article 989 then requires that the surety be competent to make gifts, which is the law’s way of saying this is treated as a gratuitous undertaking rather than a commercial bargain.

Article 1001 fixes the size of the exposure: the suretyship covers the incidentals of the debt, the costs of the first step taken to claim it, and costs accruing after the surety is notified, unless the contrary has been agreed. So the number you guaranteed is a floor, not a ceiling. Accrued interest or profit, late fees and the cost of pursuing the claim ride on top.

Whether the Bank Must Sue the Borrower First

This is the point the 2025 law changed most for guarantors, and the answer now turns on the word “jointly” in your guarantee.

Under the 1985 Civil Code, Article 1078 let the creditor claim against the principal obligor or the surety or both, in any order. There was no general benefit of prior demand. That is still the law for any guarantee signed before 1 June 2026, because Article 4(1) of the new law provides that it does not reach back over earlier transactions.

For guarantees signed from 1 June 2026, Article 1009 reverses the default. The creditor may not proceed against the surety alone before proceeding against the debtor, and may not execute against the surety’s assets before divesting the debtor of theirs. Two things narrow this sharply. It does not apply where the surety is jointly liable with the debtor, or where the law or the agreement provides otherwise, and standard bank guarantee forms in the UAE are routinely drafted as joint and several precisely to secure that outcome. And under Article 1009(3) the surety must raise the point before the court; it is not applied automatically. If the surety does demand divestment, Article 1010 requires the surety to identify the debtor’s assets at their own expense, and assets outside the UAE or in dispute do not count.

Article 1016 keeps the old rule on multiple guarantors: where several people guarantee one debt, each may be claimed against for the whole, unless they all became sureties under a single contract that does not provide for joint liability.

Article 1015 preserves the older, narrower protection as well. Where the debt was already secured by a security in rem before the suretyship arose and the surety is not jointly liable with the debtor, the surety’s property cannot be executed against before the secured property. Article 1019 lets a surety of a surety insist on the same order.

The practical advice is unchanged and now sharper: read whether your guarantee makes you jointly and severally liable. If it does, Article 1009 gives you nothing, and you are in the same position guarantors were in under the old law.

What people assume What the law says Article
The bank must exhaust the borrower first For guarantees from 1 June 2026 it must proceed against the borrower first, unless you are jointly liable, which standard bank forms make you. Before that date it could claim against either or both Art. 1009 (ex-1078)
Two guarantors means half each Each can be claimed against for the whole, unless all signed one contract without joint liability Art. 1016 (ex-1085)
I am liable for the amount I guaranteed Also for the incidentals of the debt and the costs of claiming, unless agreed otherwise Art. 1001 (ex-1067)
If I die, my family is clear The suretyship does not end on the death of either the surety or the borrower; the obligation stays against the estate of whichever died Art. 1029 (ex-1084)

The Six-Month Rule That Discharges a Guarantor

Article 1006 provides that the surety is discharged from the suretyship if the creditor does not commence judicial proceedings to claim the debt against both the debtor and the surety within six months, running from the day after the debt fell due. This is the most under-used provision in the whole chapter and almost nobody raising a guarantee dispute in the UAE knows it exists.

The 2025 law tightened the wording in the guarantor’s favour. The old Article 1092 said only that the creditor must claim within six months of maturity. Article 1006 now specifies that the claim must be judicial, that it must be brought against the debtor and the surety, and that the clock starts the day after the due date. A letter from a collections department is not a judicial claim.

Read it carefully before relying on it. It bites on a creditor that sits on a matured debt, and its effect is on the surety, not on the borrower, who remains liable throughout. How it applies to an instalment loan, where instalments fall due monthly and the bank accelerates only after a default, or to a revolving facility with no single maturity date, is a question of construction on the facts of the particular contract. What it plainly does not tolerate is a lender that lets a matured, unpaid debt go quiet for a year and then turns up at the guarantor’s door.

If a bank or a collection agency contacts you about a guarantee on an old, matured debt, the first question to ask in writing is when the debt fell due and when the creditor first claimed for it.

What the Central Bank Obliges the Lender to Do

The Civil Code sets the liability. The Central Bank’s Consumer Protection Standards set the process, and they name guarantors repeatedly.

  • Disclosure before you sign. Standard 2.1.3.3 requires a licensed financial institution to disclose whether security, a guarantor, a co-signer or collateral is required for a credit product before the consumer signs the contract, and to fully disclose the purpose of these requirements and the conditions placed on pledging.
  • An explanation directed at you. Standard 7.1.1.5(d) requires the institution to explain to consumers and guarantors the implications of pledging any collateral, post-dated payment cheques or other guarantees required to obtain the financing.
  • Your own copies, free. Standard 2.1.1.29 provides that where there is a guarantor, or more than one person signing a contract, each person must be given copies of the documents free of charge. Standard 2.1.1.28 extends that to every final document including the security and guarantee.
  • A written arrears notice to you. Standard 5.2.5.4 requires that once an account is more than 60 calendar days in arrears, the institution must immediately notify the consumer, the authorized representative and any guarantor in writing, with the date the account fell into arrears, the amounts, and the consequences of continued non-payment, which the standard lists as including demand for payment from guarantors and co-signers.

Those obligations are worth knowing because a guarantor who was never given a copy of the guarantee, and never notified at the 60-day mark, has something concrete to raise with the bank’s complaints unit rather than a general sense of unfairness.

How collectors are allowed to contact a guarantor

Standard 5.2.5.6 puts the guarantor inside the same protective perimeter as the borrower. The institution may communicate with a consumer or his or her guarantor by email, registered mail, courier, SMS, phone or another consented method, and it must not visit your place of employment or your home without your express consent or a court order, must not contact you outside 9 AM to 8 PM, and must not disclose your information to third parties beyond the credit information agency and an authorized collection agent. Our guide to debt collection rules in the UAE sets out the full timetable those standards impose.

The Cheques You Are Asked to Sign

Standard 7.1.1.8 caps security cheques: an institution must only take cheques covering the instalments and of a value not exceeding 120 per cent of the value of the loan or the debit balance, and it is prohibited to take signed blank cheques. You must be given stamped photocopies of every cheque as proof of possession, and when the financing is paid off early the remaining post-dated cheques must be returned within 7 complete business days.

Three practical points follow. Ask for the stamped copies at signing rather than later. Count the total face value against 120 per cent of the facility. And if a form is put in front of you with the amount or the date left open, that is the prohibited blank cheque, whatever it is called on the form. What happens if such a cheque is later presented and returned unpaid is covered in our guide to the bounced cheque law in the UAE after the 2022 reform.

What Guaranteeing Does to Your Own Finances

A guarantee is a liability for affordability purposes even while the borrower is paying on time. Standard 7.1.4.9(g) requires that evidence of financial obligations such as being a guarantor on other debts, margin and leveraged financing, and court-ordered payments, must be considered in an affordability assessment.

So the cost of guaranteeing is not only the risk of paying. It is the mortgage you cannot get next year, because the guarantee sits inside your debt burden ratio calculation. Before agreeing, check what a lender can already see about you through our guide to the AECB credit report and your UAE credit score, and compare the exposure against what you would be taking on if you simply borrowed the money yourself under a personal loan in your own name.

When the Borrower Stops Paying or Leaves the Country

This is where the guarantee stops being theoretical. Three provisions matter.

Article 1007 protects you if the borrower goes insolvent: if the debtor becomes bankrupt, the creditor must prove for the debt in the bankruptcy, otherwise its right of recourse against the surety lapses to the extent of the loss caused by the failure. A creditor that ignores a formal insolvency and comes to you instead has weakened its own claim. Our guide to personal insolvency and debt settlement in the UAE covers that regime.

Article 1026 runs the other way, and it is the guarantor’s own weapon. A surety for property or for the delivery of a person may apply for an order preventing the person for whom he stands surety from traveling abroad, if the suretyship arose through that person’s order and there is evidence giving rise to a fear that the surety will suffer loss. A guarantor who learns that the borrower is packing up does not have to wait to be sued before acting. See how a travel ban for debt works and how it is lifted for the mechanics, which cut both ways.

If the bank obtains judgment against you instead, the usual execution measures follow, including attachment of accounts and salary. Our guide to enforcing a court judgment through an execution case describes that process from the creditor’s side, which is the side you will be facing.

Getting Out of a Guarantee

Article 1030 lists how a suretyship is extinguished, and the routes that matter for a bank guarantee are payment of the debt, the cessation of the contract from which the borrower’s obligation arose, and the creditor releasing either the surety from the suretyship or the borrower from the debt. Three more provisions are practical:

  • Time-limited guarantees. Article 992(4) says a surety under a temporary suretyship may only be claimed against for obligations arising during the period of the suretyship. Negotiating an end date is therefore meaningful, not cosmetic.
  • Open-ended guarantees of a future debt. Article 992(3) lets a surety who guaranteed a future debt without fixing a period withdraw at any time, for as long as the guaranteed debt has not yet come into existence. If you signed for a facility that has not been drawn, this is the provision to act on quickly.
  • Settlements. Article 1032 provides that where the surety or the borrower makes a composition with the creditor for part of the debt, both are discharged from the balance. If the composition stipulates that only the surety is released, the creditor may choose between taking the agreed sum from the surety and the balance from the borrower, or leaving the surety and claiming the whole debt from the borrower.

A point that used to be genuinely unclear has now been settled. Under the 1985 Code, Article 1099(e) listed the death of the principal obligor as a mode of termination while Article 1084 made the debt payable out of the estate, and the two had to be read together. The 2025 law removes the ambiguity: Article 1029 states that the suretyship does not end on the death of either the surety or the debtor and that the obligation remains against the estate of whichever of them died, and death no longer appears among the grounds of extinction listed in Article 1030. For a guarantee signed from 1 June 2026, the death of the borrower does not release you. If a borrower has died, the size and route of the claim against the estate is still a question for a lawyer on the specific facts.

Recovering From the Borrower After You Pay

Paying does not automatically give you a claim back. Article 1024(1) provides that the surety has no right of recourse against the principal obligor for an obligation discharged on his behalf unless the suretyship arose at the request or with the consent of the principal obligor, and the surety has actually discharged the obligation.

An informal favor done for a friend who never formally asked, then paid off to protect your own record, can leave you with no recourse at all. Get the request in writing before you sign, not after you pay.

Where recourse does exist, the law gives you the tools to use it. Article 1008 requires the creditor, on being paid by you, to deliver all necessary papers to enable your recourse, and to release or transfer any other security it holds to you, with the transfer costs recoverable from the borrower. Article 1023 lets you recover expenses incurred in carrying out the suretyship. Article 1025 limits the recourse to what you stood surety for where you gave something else in lieu, and to the amount actually paid where the creditor accepted a partial settlement.

Article 1021(2) contains a procedural trap: if a claim is made against the surety, the surety must join the principal obligor in it, and if he does not, the borrower may later raise against him any defense he could have raised in the creditor’s claim. Being sued as a guarantor and quietly settling without bringing the borrower into the proceedings is how a guarantor ends up paying twice over.

The Rule Against Being Paid to Guarantee

Article 1028 prohibits a surety from receiving any consideration for the suretyship. If he does, he must return it, and his capacity as surety lapses if he accepts it from the creditor or the borrower, or from a third party with the creditor’s knowledge. Where the payment is taken without the creditor’s knowledge, the suretyship binds and the consideration must still be handed back.

This kills the arrangement that circulates in expat circles, where someone offers to stand as guarantor for a fee. It is not a service that can be lawfully sold under the general law of suretyship, and the person paying for it may find the guarantee is not what they think they bought. Professional guarantees issued by banks and insurers sit under a different, licensed regime and are not what this article is about.

Frequently Asked Questions

Can a UAE bank sue the guarantor before suing the borrower?

It depends on when you signed. For guarantees from 1 June 2026, Article 1009 says the creditor may not proceed against the surety alone before proceeding against the debtor, and may not execute against your assets before exhausting the borrower’s. But that does not apply if you are jointly liable with the borrower, which standard bank guarantee forms make you, and you must raise the point in court yourself. For guarantees signed before that date, the old Article 1078 applies and the bank could claim against either or both.

Is a guarantor liable for the full amount or only a share?

For the full amount. Article 1016 provides that where several sureties guarantee one debt, each may be claimed against for the whole, unless they all became sureties under a single contract that does not provide for joint liability, in which case each answers only for his share.

Does a guarantee cover interest and legal costs too?

Yes, unless the contrary is agreed. Article 1001 provides that the suretyship covers the incidentals of the debt, the cost of the first step taken to claim it, and costs accruing after you are notified. The exposure is therefore the guaranteed amount plus accrued charges plus the cost of pursuing it, which is why an unlimited guarantee is materially worse than a capped one.

Can a guarantor be released if the bank does nothing for six months?

Article 1006 provides that the surety is discharged if the creditor does not commence judicial proceedings against both the borrower and the surety within six months, starting the day after the debt fell due. How that applies to instalment lending or a revolving facility depends on the contract’s construction, so raise it in writing and take advice rather than assuming it clears the debt.

What must the bank tell me before I sign as guarantor?

Central Bank Consumer Protection Standard 2.1.3.3 requires disclosure that a guarantor is required before the contract is signed, together with the conditions placed on it, and Standard 7.1.1.5(d) requires the lender to explain the implications of pledging cheques, collateral or guarantees to guarantors specifically. Standard 2.1.1.29 entitles you to free copies of the documents.

Do I get told when the borrower falls behind?

You should. Standard 5.2.5.4 requires the lender, once an account is more than 60 calendar days in arrears, to immediately notify the consumer, any authorized representative and any guarantor in writing, including the arrears amounts and the consequences, which expressly include demand for payment from guarantors.

Can I be asked to sign a blank security cheque as guarantor?

No. Standard 7.1.1.8 prohibits taking signed blank cheques, limits cheques to the instalments and to a value not exceeding 120 per cent of the loan or debit balance, requires stamped photocopies to be given to you, and requires remaining post-dated cheques to be returned within 7 complete business days of early payoff.

Does being a guarantor affect my own loan applications?

Yes. Standard 7.1.4.9(g) requires lenders to take evidence of obligations such as being a guarantor on other debts into account in the affordability assessment. The guarantee consumes part of your debt burden ratio while the borrower is still paying normally, which can block a mortgage or a car loan later.

Can I stop the borrower from leaving the UAE?

Article 1026 allows a surety to apply for an order preventing the person for whom he stands surety from traveling abroad, provided the suretyship arose at that person’s request and there is evidence giving rise to a fear that the surety will suffer loss. It is a court application on evidence, not something a bank arranges for you.

Can I charge a fee for acting as someone’s guarantor?

No. Article 1028 prohibits a surety from receiving consideration for the suretyship and requires anything received to be returned, with the capacity as surety lapsing where it was taken from the creditor or borrower, or from a third party with the creditor’s knowledge. Paid guarantor arrangements are not a lawful service under this chapter.

Official Sources

Information current as of August 2026. Article numbers for the 2025 law were read from the official Arabic text of Federal Decree-Law No. 25 of 2025 published on the UAE Legislation portal, retrieved through an archived copy because the portal blocks automated retrieval. Numbers for the repealed 1985 Code were read from the Ministry of Justice eLaws English text. Every Central Bank standard was read from the live text of the Consumer Protection Standards on the Central Bank rulebook. Two limitations should be stated plainly. First, no official English translation of the 2025 law had been published at the time of writing and the portal states that the Arabic prevails, so the English wording here is our rendering of the Arabic; verify an article number against the Arabic where it is decisive. Second, this article states the general law of suretyship; where a guarantee is commercial in character, commercial legislation and the specific contract may modify these defaults, and no attempt is made here to resolve that boundary. One point previously left open is now settled: the 1985 Code was internally inconsistent on the effect of the debtor’s death, since Article 1084 made the debt fall due against the estate while Article 1099(e) ended the suretyship. Article 1029 of the 2025 law resolves it, providing that the suretyship does not end on the death of either the surety or the debtor and that the obligation remains against the estate of whichever of them died. Death no longer appears among the grounds of extinction in Article 1030.

Disclaimer: This guide is general information, not legal or financial advice. Whether a particular guarantee binds you, and on what terms, depends on the wording you signed and on facts a general article cannot assess. Before signing a guarantee, or on receiving any demand under one, take advice from a UAE-licensed lawyer.