A friend in need...

theboylard

Morning all,

ok, after sorting out my problems I've just spent ½ hour on the phone to my mate who is now in a really sticky position.

My friend, Rupert we'll call him, put his mum as a named cardholder on a couple of credit cards he had from years back that were registered at mum's. She was struggling and being the doting son who had cocked up on numerous occasions in the past, he saw this as a way of paying back his mum's support.

Anyways, although she has been paying regularly, she hasn't been clearing the debt and the card companies have generously extended the credit limit and he now has about £21k on the cards thanks to mum!

He is at the limit himself with his own problems, his partner also needs a new car desperately.

He might be able to get a loan for about £15k, but this knocks out the chance for his partner to get her car.
He has spoken to other family members who are discussing it with their relevent partners, I suggested a loan in his mum's name with the family as guarantors, this then wouldn't affect his credit would it?
Not sure about mortgage opportunities?

Opinions please?!

Ta muchly

hapless

Emmzi

hard to say without knowing mum's situation - what could she contribute??

Wickedkitten

First thing to do is get her off the card accounts. If she has a house with equity in it, perhaps she could remortgage it to get the money to pay off the cards.

tyllwyd

There is a lot of background missing - if his mum has managed to clock up £21K of debt, is her situation now sorted so that it won't continue in the future? If they get a loan, who will be making the payments, and who will be paying off the rest on the cards? Does his mum own a house with equity in it, or any other assets?

theboylard

Hi, thanks for the prompt replies.

Info I have at the mo is:

Mum is in housing assoc pad, no mortgage obviously.
No assets or savings either.
I have no idea what she has spent the money on!!!
Well, I do now! Flying off to Scotland, been to Las Vegas etc.
She has been paying about £500 a month, cards are now cancelled so that she can't do any more damage.

I have sent over the budget sheet so they can at least see what's gone/going where.

If they went the loan route, would it show as loan on rupert and sister's credit file or not?

hapless

Emmzi

If he is a guarantor, he has a contingent liability for the amount of the loan as if it were in his name, usually for the full amount of the loan. The bank should also recommend he see a solicitor before he sign it. Hard to say, but when I used to lend money, I'd treat it as an actual liability, because he might have to fork out for it, and if he couldn't, the bank'd be stuffed. They would be as well checking with equifax etc what the effect on credit file would be; and different banks may treat it differently.

If she can pay £500 a month on 21k, it's over 4 years to clear it!!! Maybe more like 5. Blimey..

Hoping other siblings can help out - and that he has a large family to help!!

CLAPTON

to make any reasonable informed judgement, both mom's and rupert's soa would be needed.
presumably he has repossessed the credit cards and nothing more is going on them?

theboylard

A bit late to follow up but...

he took a loan for £20k, his sisters are now ex-sisters!
His partners not overly chuffed, but he has taken my advice and got his mum to take out life insurance, with him named in trust as the benificiary, for the 20k. Level term, over 5 years.

Thanks for all the help.