I have to pay a loan company £5000 and I have received nothing.

bittercup

Hope this is the right place and that folks may be able to advise.

Here's the story:
A family member has been going through and continues to go through serious financial difficulties. He has crippling credit card, loan and mortgage commitments that he is barely able to make each month. About a year ago he decided that his problems could be assuaged by embarking on a scheme to become a driving instructor. The way it works is that you agree to take a course of lessons that result in you becoming an instructor. These lessons cost £5000 and you don't actually pay anything. You complete a loan agreement that becomes payable on a given date (set after your training is complete). When you complete your training, the driving school pay the £5000 to the loan company thus clearing the loan - this is on the understanding that you agree to work for the driving school for a given period of time (say a year). If you complete the training but decide not to work for the driving school then you pay back the loan with monthly repayments to the loan company of c.£200/mth.

At the time that he was investigating this, his credit rating was such that the loan company refused to make an arrangement with him. This is where I came in. He approached me to be a signatory to the loan and I agreed on the understanding that it wouldn't cost me anything and I'd be helping him out.

Here's where we are now:
For one reason and another, he never undertook the training (neither does he now intend to) and the date has passed. The loan company took the first payment off me yesterday and want me to set up a direct debit for subsequent payments. This seems ridiculous and there is no way I can afford £200/mth for something that's never been received. The family member has said that he's spoken to both the driving school and the loan company but neither are being helpful.

I plan to speak to both tomorrow but wondered what others' views were on this.

Surely this isn't right.

Many thanks if you give this your time.

Kazipoo

I would imagine if the loan is in your name, it makes no odds if he decided to go ahead or not. You are still liable to repay the loan. I would take it up with your family member and hope he feels morally obliged to pay the loan, failing that you could also pursue it legally.

vaporate

bittercup wrote: »

Hope this is the right place and that folks may be able to advise.

Here's the story:
A family member has been going through and continues to go through serious financial difficulties. He has crippling credit card, loan and mortgage commitments that he is barely able to make each month. About a year ago he decided that his problems could be assuaged by embarking on a scheme to become a driving instructor. The way it works is that you agree to take a course of lessons that result in you becoming an instructor. These lessons cost £5000 and you don't actually pay anything. You complete a loan agreement that becomes payable on a given date (set after your training is complete). When you complete your training, the driving school pay the £5000 to the loan company thus clearing the loan - this is on the understanding that you agree to work for the driving school for a given period of time (say a year). If you complete the training but decide not to work for the driving school then you pay back the loan with monthly repayments to the loan company of c.£200/mth.

At the time that he was investigating this, his credit rating was such that the loan company refused to make an arrangement with him. This is where I came in. He approached me to be a signatory to the loan and I agreed on the understanding that it wouldn't cost me anything and I'd be helping him out.

Here's where we are now:
For one reason and another, he never undertook the training (neither does he now intend to) and the date has passed. The loan company took the first payment off me yesterday and want me to set up a direct debit for subsequent payments. This seems ridiculous and there is no way I can afford £200/mth for something that's never been received. The family member has said that he's spoken to both the driving school and the loan company but neither are being helpful.

I plan to speak to both tomorrow but wondered what others' views were on this.

Surely this isn't right.

Many thanks if you give this your time.

Why did he choose to not do the training?

This is nothing against you personally but never give money, or take on a loan for another family member if you can not afford to lose it.

Others will be along in a moment.

I'm also going to take a wild guess that this is Red L or something company?

bittercup

Thanks people.

vaporate wrote: »

Why did he choose to not do the training?

It's complicated. He is also undergoing a messy divorce and I think the plan was originally to do something conciliatory and this was a factor in him signing up. This is no longer a factor and he's lost motivation and would now argue lack of time etc.

vaporate wrote: »

This is nothing against you personally but never give money, or take on a loan for another family member if you can not afford to lose it.

Well, I could bear it and could lose it - but at considerable sacrifice. I guess I always knew this might be an (ouside) possibility.

vaporate wrote: »

I'm also going to take a wild guess that this is Red L or something company?

You got it.

wynnvegas

I'm afraid you're landed with it. My brother has just done a similar thing to my mum with some daft computer training company which I'm none too impressed with - either her stupidity or his knowing that he can take advantage of her. There's almost no way you'll get out of paying for it - a harsh lesson I'm afraid but it is (relying on the inherent laziness of people who want a sweet life handed to them on a plate) what these companies do best.

vaporate

Dear OP,

I'm sorry if I came out abit strong with my post. You have enough on your plate so nothing personal. It just annoys me when people suffer because of other people regarding loans.

Check this website for other threads about RED company. I've seen a few myself and it might be of some help.

I take it there is no 'get out clause' in this contract?

chalkie99

bittercup wrote: »

He approached me to be a signatory to the loan and I agreed on the understanding that it wouldn't cost me anything and I'd be helping him out.

Sorry, but there would be absolutely no point in adding your signature to a loan unless it was going to make you liable to pay it if he defaulted.

asharon

He might not be motivated to do it anymore but it's simple. He can do what he agreed to do, either do the course and work off the debt or he can pay the £200 a month himself.

If not take him to court.

jonesMUFCforever

I always thought that if you guaranteed a loan you had to have independent legal advice before signing.
If this did not happen it could be one avenue to explore to stop paying.

bittercup

jonesMUFCforever wrote: »

I always thought that if you guaranteed a loan you had to have independent legal advice before signing.
If this did not happen it could be one avenue to explore to stop paying.

I didn't guarantee his loan, it is in my name which is a shame.

Anyway, I'd like to thank you all for your contributions. I am really impressed with the speed and level of support.

It has really helped me. I was thinking of contacting both the driving school and loan company; I guess I still should (and maybe CAB). I think I know where that will lead. Number one priority is to approach the family member and have a 'full and frank...'

Cheers.

jonesMUFCforever

Then the loan and debt is yours - sue in small claims - you will win but even if you do not see a penny of your money they will get a CCJ preventing them getting any further credit.