When the guarantor wants out of a qist plan

Work out what is actually left to pay, not the size of the whole plan. If the buyer has paid on time and you would give him that remaining amount today with no guarantor, let the guarantor go and write it down. If you would not, offer a replacement name, a shorter plan, or a smaller share.

The call you did not expect

Six months into a twelve-month plan, the guarantor comes to your counter. He is uncomfortable before he speaks. Then it comes out: he wants his name taken off the qist plan.

Sometimes he explains. Sometimes he just says he cannot stay on it and looks at the floor.

Your first reaction is the wrong one, and almost everybody has it. You feel that the ground has moved, that the security you built the plan on has been pulled away, and that this must be a sign the buyer is about to stop paying.

Slow down. Nine times out of ten it is not about the buyer at all, and the amount you are actually exposed to is far smaller than the number in your head.

What a guarantor actually promised

Before you answer him, be clear in your own mind about what he agreed to, because most arguments here come from two people holding two different ideas of it.

A guarantor is not a second buyer. He does not owe you money while the buyer is paying. What he agreed is that if the buyer stops, he will either pay what is left or produce the buyer, and that his standing in the neighbourhood is behind that promise.

That is why the guarantor works at all. He is not collateral. He is pressure, applied by someone the buyer has to face every week, which is precisely the reason it is worth taking one in the first place, as set out in when to ask for a guarantor and when not to.

And this matters for his request, because a promise like that cannot really be enforced against a man who has decided he is out. A guarantor who has publicly withdrawn is a guarantor who will not help you collect. Keeping his name on the paper against his will buys you a signature and loses you the only thing the signature was for.

Why he wants out

There are three common reasons, and they lead to three different answers.

The first is that his own situation has changed. He has taken on a plan of his own, or the household has had a bad turn, and he no longer wants a promise sitting over him. This has nothing to do with the buyer and is the easiest one to deal with.

The second is that the two of them have fallen out. A quarrel over property, a marriage, a family matter. He does not want his name tied to that person any more. Also nothing to do with your money, but worth knowing, because a guarantor who has quarrelled with the buyer is a guarantor who will not chase him for you.

The third is the one you must not miss. He knows something. He has heard the buyer is about to move away, or lose his job, or that other shopkeepers are already chasing him. He is getting out ahead of a problem you have not seen yet.

You separate the three with one calm question: has something happened with him, or has something happened with you. Ask it gently and most guarantors tell you the truth, because the man in front of you is not trying to cheat you, he is trying to leave.

Check these before you answer

Do not give an answer at the counter. Say you will look at the account properly and speak to him in the evening, then actually look.

Check all six before you answer him

• How many qists are already paid, and how many are left
• Has the buyer ever been late, and by how many days
• What the goods are still worth if they come back to you
• Whether the buyer knows his guarantor wants to leave
• Whether the two of them have fallen out with each other
• Whether you would have given this plan with no guarantor at all

Say a Rs 36,000 plan, 12 qists of Rs 3,000, and he asks in the sixth month

1. 1-5Paid on time, Rs 15,000 collectedRs 15,000Paid
2. 6The guarantor asks to be releasedRs 3,000Due
3. 7-12Still to come after thatRs 18,000Due

The timeline is the part shopkeepers skip. You are not deciding about a Rs 36,000 plan. Five qists are already in your galla, so what is genuinely at risk is Rs 21,000, and it shrinks by Rs 3,000 every month that passes.

Now ask the last question on the checklist, which is the whole decision in one line: knowing what you now know about this buyer, six months of payments in, would you give him this remaining amount today with no guarantor at all?

If the answer is yes, the guarantor is no longer doing any work. Let him go and take the goodwill, because a man you released cleanly will send you customers for years, and a man you trapped will tell the story of how you trapped him.

Three ways to say yes

If the answer is no, do not simply refuse. Offer him one of these instead.

The first is a replacement. He brings you another guarantor you are willing to accept, and you swap the names in front of both of them. This is fair, it is quick, and it solves the problem completely. Most guarantors accept it, and the ones who cannot find a replacement have just told you something useful about the buyer.

The second is a shorter plan. Sit with the buyer and agree that the remaining amount is paid over fewer, larger qists, and the guarantor's promise ends on the day the last one is due. Nothing is added to the total for this, because nothing is ever added to a qist total after the plan is made. You are compressing the same money into less time, and the guarantor gets a definite end date instead of an open one.

The third is a partial release. His promise is cut down to a fixed amount rather than the whole balance, or to the next three qists rather than all of them. A guarantor who wanted out entirely will often accept a defined, smaller share, because what frightens him is the open-ended shape of it, not the money.

All three are better than a flat no, because all three keep him inside the arrangement instead of turning him into somebody who stops answering his phone. Once that happens you are left handling every late payment alone, which is the harder road mapped out in what to do when a qist is missed.

When the answer has to be no

Sometimes it does. If the buyer has already been late on two qists, if the goods are worth much less than what is left to pay, and if the guarantor cannot produce a replacement, then releasing him would leave you holding a plan you would never have agreed to.

Say no properly. Not by refusing to discuss it, but by explaining the three offers, showing him the account, and telling him you will revisit it when three more qists have been paid on time.

Then do exactly that. Put a note against the plan for the date you promised, and when it arrives, go to him yourself. A guarantor who was told to wait and then heard from you on the day you said is a guarantor who stays useful. One who was told to wait and then ignored is gone anyway, whatever the paper says.

Write down whatever you agree

Whatever you decide, it goes on paper the same day, in front of both men where possible.

Write which qists are already paid, what is left, what was agreed about the guarantor, and the date. If someone new has taken his place, get the new name, the phone number and the address on the same page. If the release is partial, write the exact amount his promise now covers.

The reason is simple. An arrangement that lives in three people's memories will be remembered three different ways the moment a payment is missed, which is when everybody's memory becomes convenient. Wasoolo keeps the guarantor's details on the plan itself and every qist marked as it is paid, so the day somebody asks what was agreed, the answer is on a screen rather than in an argument. If your khata is paper, one dated line signed by both of them does the same job.

Common questions

Can a guarantor legally remove himself without my agreement?

Treat this as a practical question rather than a legal one, because for a shop plan the paper you both signed is between the two of you and there is rarely anything to enforce quickly. What actually decides the outcome is whether he stays willing to help. A man who has publicly stepped back will not chase the buyer for you, so holding his name against his will gives you a signature and nothing else.

Should I tell the buyer that his guarantor wants out?

Yes, but after you have decided, not before. Telling him early turns your decision into a quarrel between the two of them and you will never get a clear picture. Once you know your answer, tell the buyer plainly what has changed and what you need from him, whether that is a replacement name or a faster plan.

The guarantor offers to pay the whole remaining amount himself to get out. Should I take it?

Take it if the amount is right, and be clear about what happens next. The plan closes, the guarantor now collects from the buyer himself, and your shop is out of the middle. Write a receipt showing the plan is settled in full, hand the buyer a copy too, and do not keep collecting qists after that, because the money is no longer yours to collect.

What if he wants out and the buyer has already missed a payment?

Then the request is not really about him, it is about what he has noticed. Deal with the missed qist first and only then answer the guarantor. If the buyer catches up and stays clean for a few more months, revisit the release then. Letting a guarantor go in the same week a payment was missed is the one version of this that usually ends badly.

Can I add anything to the plan for the extra risk if I release him?

No. A qist total is fixed when the plan is made, and nothing is added to it afterwards for any reason, including a change of guarantor or a delay. If the shape of the deal no longer suits you, change the length or ask for a replacement name. The total the buyer agreed is the total he pays.

How do I avoid this whole situation next time?

Take guarantors for shorter plans, name the end date out loud when you take him, and tell him at the start what would release him. A guarantor who knows from day one that his promise ends in eight months, or ends when the balance drops below a stated figure, almost never comes back asking to leave. The way to size the plan in the first place is worked through in building a qist plan that stays fair.