Advice needed re: HSBC Joint Secured Loan/Ex not paying!

m4sonsmum

Hi

I am trying to get some advice to help a friend who is in despair regarding a secured loan on her home.

The loan was taken out with HSBC in hers and her then husbands name, it was a business loan and it was secured to her house.

They have since parted and the business is no more, for the first couple of years her ex paid half of the loan amount per month, since he found a new partner he has not paid a penny , leaving her to foot the £450 per month on her own which she has done now for about 2 years.

Her mortgage is also with HSBC his name has been taken off the mortgage but it is still on the loan agreement.

She is on her own now with only her wage and is strugging to pay her mortgage and the £450 loan this is before all the other general household bills / cost of living expenses.

She has been to HSBC to discuss the situation and their basic answer is, they are not bothered who pays it as long as it is being paid they can not enforce him to pay his half even though he is a named lender on the loan agreement,

As you can imagine she is now at her whitts end with worry, there is still about 8 years left to run on this loan,

surly there must be a way of enforcing him to pay his half, its ridiculous that he can just walk away from it ?

Any advice / pointers in the right direction would be appreciated.

Thanks

maginot

Both of them are jointly and severally liable for the loan. That was what was agreed by both parties when they took out the loan.

It is not the banks job to spend money sorting out relationship breakups. The fact the loan is secured against your friends house means the bank is always going to go after your friend as they are the ones who are more likely to pay the loan.

The friend could take the former partner to court to try and get payment but this could be costly as from the monthly payments I presume this is more than the small claims limit.

This is why no one should take out joint loans unless they are able to pay the full amount.

opinions4u

Both borrowers are fully liable for the debt.

Both borrowers are individually liable for the full monthly payment.

While what HSBC have said may be uncomfortable, it is accurate. They don't care who pays as long as they get what's due. They can send nasty letters to both borrowers, but if only one cares about trying to keep up to date on the payments it needs to be the full payments.

If full payments aren't being made the lender will, sooner or later, repossess.

InsideInsurance

As long as they get the money HSBC wont care which parties are contributing to it, as has been said already they are both fully liable for all the monies owed.

Has she gotten divorced yet (given you refer to him as the ex-husband)? Was the loan not considered in the financials of separation?

Ultimately she either has to pursue him herself for the money but that may be a fairly dead ended route as presumably there were no documents signed beyond the loan agreement. She could stop paying it in which case it will damage both of their credit histories and the bank would pursue both of them for it. As she seems to have gotten the house out of the marriage breakdown she may be seen as the one with the greater assets so better chance of success.