The personal guarantee “Aval” under Brazilian law is a guarantee commonly used to secure credit facilities with Brazilian borrowers and guarantors, enabling the creditor, in the event of default, to access the personal assets of the credit borrowers, reducing the risk of the operation.
However, some care must be taken when receiving this type of guarantee.
According to Brazilian legislation, the guarantee provided by a married individual under the regime of partial or total communion of assets requires the express authorization of the spouse to be valid, which is called “outorga uxória”.
This consent is necessary considering that in Brazil (i) in the partial communion regime, the assets acquired during the marriage belong to both spouses, in a 50/50 proportion; and (ii) in the total communion regime, all assets are shared, whether prior to or after the marriage.
The question that arises is: does the spouse who grants the consent become a guarantor of the operation? Could the couple’s assets be accessed in full in case of default, or should the part that belongs to the consenting spouse be reserved in a possible execution?
The Brazilian law is not clear on the subject, but the The National High Court of Brazil (STJ) has already faced the issue, stating that the spouse who provides consent cannot be considered a guarantor, as the guarantee is a guarantee of a personal nature, understanding that the spouse’s share must be protected in the event of restrictive acts against the couple’s common assets.
Therefore, creditors must consider that their right to execute the married guarantor in the brazilian community property tends to be limited to the portion of the assets that belongs to the latter, so that the sharing of the consenting spouse must be reserved, except if both appear as guarantors of the operation.
