What can you do with a joint loan when partners split?

gb12345

WorriedParent wrote: »

What I do not agree with is the fact that because the ex has intentionally ceased their portion of the payment, that my daughter must "automatically" assume responsibility for the full amount and then because the loan gets paid by her, no-one chases the ex for any contribution, because the financial record will show what a good customer they've been. Meanwhile they're driving their nice new car and all the while my daughter foots the bill.

As has been said before - the ex doesn't have to get away with it, but it will need to be your daughter that takes the action by sending a LBA and persuing him through the courts for his half the outstanding debt.

The bank will chase both of them if the loan is defaulted on (which will happen if only her "share" is paid), but in the end it will be the easier target that they get the money from. Does the ex still work for a bank? He may well have worked out that he's got your daughter over a barrel - if she doesn't pay up then her career is affected, whilst his possible won't be.

WorriedParent

John1993 wrote: »

By understanding do you mean, perhaps, that she should be allowed to default, but no record be made of that?

What solution exactly are you looking for here?

You are becoming inconsistent in your posts, by the way. In your original post you say;



And yet now you say that she has every intention of standing by it.

Which is it, she will repay it as agreed, or she can't?

If I'm inconsistent, then it's because I'm here to learn, but to answer your question in parts:
1. My daughter cannot afford the entire loan with the payment as is, but she is desperate to ensure they are met and the suggestions of extending the loan period may help with that.

2. The solution I would like is for the bank to continue to accept my daughter's payments without defaulting her and without trying to force her to pay what she can't manage, that is not conducive to either her or the bank getting a fair deal.

3. No, I am not suggesting she should be allowed to default and no record made of it, definitely not, but my concern is that she is going to be forced to make payments she simply can't afford through no fault of her own, with unintentional default being the end result.

4. What do I want from this? I want my daughter to be able to keep good on her agreement with the bank, which is what she and they want too. All I'm asking is for some guidance and help from the bank to help her achieve that.

5. What I do not want is for the bank to force full payment from my daughter and for the ex to get off with no commitment and no penalty, that's plain wrong in anyone's book!

6. "Jointly and severally", please don't quote this again, it's a given and it's accepted.

7. The cost of taking the ex to court is too great and simply exacerbates the situation, so not an option.... kneecap maybe, court action no.. I'm kidding, of course.

WP

Good_Goose

This situation is as clear cut as it can get.

Each borrower has signed a contract to borrow the money, and agrees to make repayments as stated on the agreement.

What has happened here (And happens 1000s of times) is that the OP's daughter has agreed to this loan without thinking of the consequences of relationship breakdown, and now is finding out the hard way.

Legally there is nothing she can do, and by being stubborn and refusing to pay/risking your career and credit rating for years to come, is making matters worse.

If she genuinely cannot afford the payments, its best to approach the lender, explain the situation and give them an honest breakdown of your income & expenditure, along with a realistic and meaningful monthly payment you can pay.

Hopefully they will agree to the affordable payment, and never make the same mistake again.

Lesson for everyone, always read and understand ANY contract, and only sign if you are fully happy with the terms.

Also understand that relationships (even family relations) can breakdown, and when there is money involved this increases the risk substantially of things going sour.

Whenever you enter into a contract with another person(s), be extra careful you know exactly what you are agreeing to, and what the worst case scenario will be if the other party defaults or the situation becomes sour.

IMO money is one of the biggest relationship/family destroyers there is.

matttye

WorriedParent wrote: »

6. "Jointly and severally", please don't quote this again, it's a given and it's accepted.

If it was accepted, then you wouldn't be saying:

WorriedParent wrote: »

but my concern is that she is going to be forced to make payments she simply can't afford through no fault of her own, with unintentional default being the end result.

The fault lies in her taking out a joint loan in the first place when she is not in a position to pay back the full amount - only half.

Morally, the ex is a pig and your daughter is a victim here, but legally she's duty bound to pay the full amount if the other half isn't paying. The way to bring some fairness into the situation is to sue the ex. That is the only realistic way to deal with this and for the ex to get his comeuppance.

sharp82

Just on point 7. Whilst I agree it is costly to take him to court, the threat of court action might move things along.

Treat him like a debt collector would. Threaten (with in the law of course) lots, do little

gb12345

WorriedParent wrote: »

7. The cost of taking the ex to court is too great and simply exacerbates the situation, so not an option.... kneecap maybe, court action no.. I'm kidding, of course.

The cost of taking the ex to court would only be £100 - £200, surely between you you can afford to raise that - it is the only way that the ex will made to pay.

rizla_king

WorriedParent wrote: »

3. No, I am not suggesting she should be allowed to default and no record made of it, definitely not, but my concern is that she is going to be forced to make payments she simply can't afford through no fault of her own, with unintentional default being the end result.

That he is not paying what he informally agreed to with her is not her fault, but if she did not want the risk of this happening then she should not have signed up to a joint loan of this sort.

Both signatories are jointly liable for the whole payments. If the whole payment is not made, then both parties will receive a default.

I sympathise with her situation, but unless she was actively mislead by the bank when the loan was taken out regards liability and what would happen if payments were not made, then it's a problem of her own making by entering into the loan.

If you still think it is unfair then she always has the option of taking the matter to the Financial Ombudsman who will make a decision.

kelpie35

As already stated by others, this has happened to me in the past and 1000's of others too.

If she wishes to keep a perfect credit rating and a career that allows her to progress, then the only solution is to pay the full amount over a longer period, or you help your daughter out by paying some of the loan for her.

One thing's for sure your DD will have learnt a big lesson in life, do not take out a loan to pay off someone else's debts.

John1993_2

WorriedParent wrote: »

What I do not agree with is the fact that because the ex has intentionally ceased their portion of the payment, that my daughter must "automatically" assume responsibility for the full amount and then because the loan gets paid by her

Which is just bizarre. She willingly signed up to exactly that deal. She asked for, and was given, a loan with this term attached.

John1993_2

WorriedParent wrote: »

4. What do I want from this? I want my daughter to be able to keep good on her agreement with the bank,

Edited to remove original post. No point flogging a dead horse, when the point is just that the OP and I differ quite a bit in what we view as fair.