"I'll sign just so the loan goes through" — that is how many stories begin that later end up with a lawyer. Co-borrowers and guarantors help get a loan approved, but they take on real risk. It is worth understanding that before you sign — not when the main borrower's relationship, business or health changes.
The roles
- Borrower and co-borrower. They sign the loan agreement together. The bank adds up their incomes but also counts all their obligations. Each owes the whole loan, not half.
- Guarantor. Receives no money and usually does not own the property. They undertake to answer for the borrower's debt (Art. 138 et seq. of Bulgaria's Obligations and Contracts Act, ZZD). Their liability is joint and several with the borrower (Art. 141 ZZD) — the bank can claim the full amount directly from them.
- Third-party mortgagor. Puts their own property up as security for someone else's loan — for example, parents mortgaging their home for their child's loan. They are not liable with their other assets, but they risk the property.
Ownership and debt are separate
A common confusion: who is on the title deed and who is on the loan agreement are two different questions.
- You can be a co-borrower without being an owner — carrying the full debt risk with no share in the property.
- You can be an owner without being a borrower — for example, with a home bought during a marriage. The bank will usually require the spouse's participation or consent. More on how property works between spouses in our guide Spouses and property.
If you are not married but are buying together, set out the shares in the title deed and who contributes what — in writing. That is the starting point for any settlement if you separate.
What each party risks
The co-borrower is liable for the whole loan until the last instalment. The loan sits in their credit history and in the Central Credit Register, and any future lender will count it as their obligation.
The guarantor is in the same position towards the bank. If they pay instead of the borrower, they can claim the money back from the borrower — but that is a separate dispute, often with someone who can no longer pay. A guarantee is also recorded in the Central Credit Register and reduces the guarantor's own capacity to borrow.
The third-party mortgagor risks the property. If the loan is not repaid, the bank can enforce against it.
What happens on separation or divorce
The bank is a party to the loan agreement; your arrangement between yourselves is not. Whatever your divorce settlement or private agreement says, for the bank you both remain debtors until it agrees otherwise. If one of you stops paying, the bank will pursue the other for the full amount.
There are usually four real options:
- One partner buys out the other's share and refinances alone. They must qualify on their own — including the BNB limit on debt payments relative to income. The new loan repays the old one, and the departing partner is released.
- The bank agrees to release one borrower. This is an amendment to the agreement that requires the bank's consent and a fresh assessment of the remaining borrower's creditworthiness. The bank is not obliged to agree.
- Selling the property. The loan is repaid from the price and the rest is divided. How a mortgaged property is sold is set out in our guide Selling a property with a mortgage still on it.
- Keeping the joint loan and agreeing between yourselves. Possible, but risky — you depend on the financial discipline of someone you no longer live with.
While you work out a solution, the instalments must be paid. Arrears show up in both credit histories and can lead to the bank calling in the whole loan.
When a guarantor is released
A guarantor is not released automatically because their relationship with the borrower has changed. The commitment ends when:
- the loan is repaid — in full, including via refinancing with another bank;
- the bank agrees to release them — usually in return for another guarantor, additional security or higher borrower income;
- in certain cases, by operation of law. Article 147 ZZD provides that a guarantor remains liable after the debt falls due only if the creditor sues the borrower within a set period. How this applies to instalment loans is a matter of case law — if you think it may apply to you, consult a lawyer.
Before you sign as co-borrower or guarantor
- Ask for the loan agreement and the repayment schedule — you need to know what you are guaranteeing.
- Ask the bank whether it will notify you of arrears.
- Consider whether you could carry the full instalment alone if necessary.
- Discuss life insurance for the main borrower.
- Consider a larger down payment or a smaller loan as an alternative. Other options when income falls short are covered in our guide to mortgages with foreign or self-employed income.
In short
- Co-borrowers and guarantors are liable for the whole loan, not a share of it.
- Ownership and debt are separate — put both in writing.
- On separation, the bank is not bound by your settlement. The way out is refinancing, the bank's consent or a sale.
- A guarantor is released by repayment or the bank's consent, not by the end of a relationship.
If you are considering a loan with two borrowers or a guarantor — or looking for a way out after a separation — call us or come into the office. We will help you weigh the options and prepare the conversation with the bank.
This is general information, not legal advice. In a dispute or divorce, consult a lawyer. Verified as of October 2026.
