Question #2 (3 marks)

On May 1, Mr. B. Dunne and a business partner applied for a bank loan to purchase a piece of property as an investment.Unfortunately, they did not have enough collateral to secure the loan without a guarantor.Mr. B. Dunne approached his wife, who was also a successful business person, to act as the guarantor and she agreed.Contrary to the bank's usual policy, they did not recommend Mrs. Dunne receive independent legal advice prior to signing the documents.When Mr. B. Dunne and his business partner defaulted on the loan, the bank sued Mrs. Dunne for the outstanding amount.Is the bank able to collect on this loan? What issues may arise?