Guarantor on an flm loan what happens if i go to court?

T7YVB1

Hi there,

I extremely misguidedly agreed to be a guarantor on a friends flm loan a couple of years ago (please no judgements i know how stupid this was, i am merely here for advice as i am really desperate and have nowhere to turn)

All has been well, except a couple of late payments (which we sorted out between us) until this past month. My friend did not have the money to pay the end of Januarys payment. They have since harressed me as the guarantor with daily text messages and phone calls. My friend said he had called them and let them know that he would not be able to pay until the end of this month but they say that this is too late and they will be taking us to court before then.

My friend is now avoiding/ignoring all my calls and recently moved accross the country and i am now panicing that he will just leave it all to me.

The only thing is since agreeing to being guarantor i have lost a job and a housemate and am barely struggling to get by myself. I have explained this to flm who have no sympathy whatsoever and tell me that this is one of my regular bills along with my others regardless of how much money i have it is a priority as much as my mortage. They do not understand that if i pay this i will not even be able to afford to eat! (i have £200 left after my other bills and they want to take £155) and i need petrol to get to my other job.

They said if it is not paid on my payday this month then it will be refered to court and they will come after my home. I was wondering how much of this is actually scare tactics? can they realistically take my house to cover the loan (theres about 2500 left on it) even if i am offering to pay a more affordable amount? Other friends who have been taken to court over debts have had all of their charges knocked off and have to pay measly amounts of like £1 a week. BUT flm do insist that guarentors are homeowners so im really scared, should i be paying this and going without food so i dont lose my house?

Has anyone gotten to the stage of going to court with flm? if so what happened?

Thankyou in advance for anyone that takes the time to respond xxx

simpywimpy

I think the court would surely give you the chance to pay the rest of the outstanding loan at an amount you can afford before any further action such as taking your home. This would be a last resort. They could even just put a charge on the property which means they will be paid from the proceeds should you ever sell it.

Can you try and track your "friend" down?

JasX

I guess it trashes your credit rating too....

T7YVB1

Im not so bothered about my credit rating as i think i already have all the credit i need, i already have all my bills/mortgage/mobile sorted and a loan that i pay back everymonth.... i never miss a payment on mine :-( so dont see what i would need credit for.

no i dont know how to track him down, i got his new mobile number off his sister as he hadnt even given me that. but cant see her giving me his address once she cottons on what its about. shes very loyal... im planning on trying her but dont see me getting anywhere.

simpywimpy

Its a disgrace that they've just dropped you in it like this - they should be ashamed of themselves.

Good luck with sorting it out

Beast

Does your mortgage deal never expire? Surely when it does then you'll certainly need to be looking credit worthy to lenders?

pippitypip_2

I don't know if I can be of help, but I'll try! I have an FLM loan but somehow without a guarantor - they're quite confused as to how that happened but nevertheless it did.

I'm in a plan with them as I defaulted but at first I did get a lot of threatening letters confirming they would chase my guarantor/ take me to court. Obviously not having a guarantor they couldn't try that option but I kept in contact with them, agreed a repayment figure - stick to it and only ever speak to them maybe every 3 months now.

My best advice is to speak to them and ask who has been assigned your case - that way you only ever speak to one person. Then speak to that advisor and explain the situation fully. Give them a breakdown of your budget and what you CAN afford to pay and then settle an agreement to pay it on a certain date each month - they take it directly from my card details. They do seem to prefer having an offer of payment to no payment whatsoever - quite understandable really. Following this will certainly stop them harassing you - it's just a ploy to get you to talk to them and make payments.

Unfortunately because your crappy friend has dropped you in it, you are now 100% liable for this debt, as if it were your own, so you will now need to include it in your outgoings somehow. I'm afraid that's what you sign up for by being a guarantor. What you DON'T have to do is forfeit food or mortgage payments to do it.

edited - do you have a copy of the agreement and in what capacity you are the guarantor? My loan with FLM was unsecured with no guarantor, so I'm not sure how it works with a guarantor and whether they can or not make a judgement on your house.

Don't forget there are costs involved to take you to court or pursue any assets and they don't really want to go down those routes unless they have to. Yes they would ultimately pass those charges onto you, but it's in their best interests to just get as much payment as possible.

Let me know if I can be of any further help.

hth,
pippitypip

pippitypip_2

Also, how much longer will it take to pay the loan off? i.e. how much longer has it left to run?

pippitypip

T7YVB1

I offered to pay affordable amounts but they were having none of it, they said as they were a small company they cant afford to do payment plans. They just keep saying it will go to court, and when that happens the legal team will go after the full amounts not just the £155 a month.... and when obviously i cant pay that they will go after my house!

It has a year and a half left to run... they tell me that i can possibly claim it back by filing a claim against him in the small claims court but i just cant afford to pay it at the minute.

Actually no my mortage dosnt have to expire i am fortunate enough to have an good mortgage deal where i always pay 0.99% above england base rate. At the moment i am paying 1.49%.

RobertoMoir

staciemccord wrote: »

I offered to pay affordable amounts but they were having none of it, they said as they were a small company they cant afford to do payment plans. They just keep saying it will go to court, and when that happens the legal team will go after the full amounts not just the £155 a month.... and when obviously i cant pay that they will go after my house!

It has a year and a half left to run... they tell me that i can possibly claim it back by filing a claim against him in the small claims court but i just cant afford to pay it at the minute.

Actually no my mortage dosnt have to expire i am fortunate enough to have an good mortgage deal where i always pay 0.99% above england base rate. At the moment i am paying 1.49%.

Invite them to take you to court, I bet they'll be less keen than they sound now while they think you are scared of court. The judge ultimately won't make you pay what you can't afford (though they will issue a CCJ requiring you to repay the debt). As guarantor, you are liable to FLM for the debt, and any issue with the borrower themselves is, sadly, your problem not theirs.

pippitypip_2

staciemccord wrote: »

I offered to pay affordable amounts but they were having none of it, they said as they were a small company they cant afford to do payment plans. They just keep saying it will go to court, and when that happens the legal team will go after the full amounts not just the £155 a month.... and when obviously i cant pay that they will go after my house! QUOTE]

What does your copy of the FLM agreement say you are liable for? Obviously the full amount etc etc, but to what extent? Is it actually secured on your house?

What is the full monthly payment, and how how much did you offer? I think they're still pressing you as only 1 payment has actually been missed. They're trying to intimidate you into making full payments. But I don't know (without more knowledge of the guarantor side of the agreement) exactly how much legal standing they have - it could be different from a simple unsecured loan, I'm not sure.

The only thing I can suggest is once a month calling your assigned advisor and explaining the situation, whilst only making the payment you CAN afford. Keep this up and there are then only 2 options: 1 they do take you to court and get a judgement on your house, or 2 they eventually formally accept your payments with a review of your financial situation every 3 - 6 months.

I hope this helps,
pippitypip