guarantor is possibly filing for bankruptcy

itough

hi i was wondering if anyone would be able to help?

I have just been told by my friend that her guarantor (her mum) may have to file for bankruptcy (if she doesn't try to run away from her debt first!) what happens to her flat?

Will she loose it? The flat is in her name, its not joint ownership.

thanks!

silvercar

Is this a rental guarantor? If so it is not a grounds for eviction to say that the guarantor has gone bankrupt. It could be that on renewal of the tenancy a new guarantor could be requested. Failing that the tenancy would become periodic and the tenant risk being evicted by a section 21 order giving 2 months notice. It could be that the landlord is happy now that he knows the tenant as a good one.

missyp123

if its rental i dont believe they would even re-do a credit check on the existing guarantor??? (if you did'nt mention it)

silvercar

unless the guarantor included the liability in their list of creditors and the OR wrote to the landlord.

itough

hi sorry its her flat she owns it

silvercar

You need to be clearer. The mum is the guarantor of the flat she owns? Or the mum is the guarantor of the flat your friend owns? In which case what is she guaranteeing? the mortgage payments?

itough

sorry my friends mother is the guarantor on my friends flat (my friend owns her flat) and my friend is scared that she will loose her flat due to her mother possibly filing for bankruptcy. mortgage payments are around 300 a month and my friend pays them.

itough

she is guaranteeing the mortgage. flat was only 40000

Paul_the_Painter

If she keeps up with the mortgage payments she will not lose her house. The mortgage company wanted a guarantor at the beginning of the mortgage, but the mortgage is now running. The guarantor element would only come into effect of your friend stopped paying, and I am not sure whether the guarantor element of the deal is still valid.

I would advise your friend to stay quiet, it is not really her concern unless there is anything in the paperwork of the mortgage that requires her to inform them if the guarantor becomes BR.

But the mortgage co CANNOT reposses her home if the payments are up to date. The lack of an effective guarantor may mean the mortgage company are less flexible if she runs into arrears at some time in the future, but it should never get to that point.

Tell your friend to relax, pay her mortgage, and enjoy her home!

Also make sure her mum knows that too, as she is probably under enough stress at the moment without worrying about her daughters house.

silvercar

Is being a guarantor a liability that should be declared to the OR?

itough

thanks for all the help guys.