Collateral by a third party of the borrower's obligations under the loan: the risk of losses incurred by the pledger (part II)

Introduction: the paper concludes the study of a pledge transaction by a citizen-owner of his residential premises to secure the obligations under a bank loan of a commercial organization-borrower. The paper analyzes the illegal behavior of the head, who is the sole founder of the borrower organization, expressed in the malicious evasion of proper repayment of the credit debt to the bank, as well as the interest on the loan received, in personal fictitious bankruptcy. The illegal ways of evading the financial responsibility of the debtor-citizen to the creditors are revealed. The purpose of the study is to reveal the current law and order of protection of civil rights of a citizen- pledger. Methods: the research is based on the authors’ materialistic worldview and the general scientific method of historical materialism. The general scientific methods of cognition are applied: dialectical, hypothetical-deductive method, generalization, induction and deduction, analysis and synthesis, and empirical description. The research also uses the specific scientific methods: formal-legal, method of concrete-sociological research, comparative law analysis, the structural-functional method, etc. Results: a number of court-ordered acts reflecting the law enforcement peculiarities to the situations involving interacting entities - individuals and legal entities - during the long-term litigation under study are analyzed; the emergence and development of the related procedural relations and relationships of civil and criminal legal substance are revealed. Conclusions: it is proved that the probability of an adverse event occurring during the term of a long-term collateral transaction is quite high and can be realized in the form of losses that may be incurred by the owner-mortgagor of the residential premises, in the amount of money collected from him for other persons’ debts, and which later will be very difficult to claim and actually get.