I've heard of a similar situation as well. It's a common saying here to never become somebody's hoshonin (guarantor), no matter who it is you're helping out.
If the person needs a guarantor, it means that they cannot afford the loan.
Even if they have the best of intentions, life may happen (people die before their time for many reasons), they can get caught up with the wrong crowd and fall out of (financial) grace, a bad partner can get them to "drop this life and move away" (ignoring obligations), and you can end with a damaging debt.
In Japan you need guarantors even for mundane things like renting an apartment. This is particularly difficult for immigrants if they don't know anybody and their employer won't sponsor them.