"Joint & Several" - What does this really mean

DevCoder

They'll target the person they think is in the best situation to pay first and then hound the second person as a secondary route, quite often Person 1 pays more than 50% and so the chasing of Person 2 is made easier for the bank.

DCFC79

Clive_Woody wrote: »

Could we get a Poll on this thread please, I think that would make it more dynamic?

Id happily go for the poll idea ?

HPoirot

I don't think the banks would compromise, even if they don't go after both parties the usual route is for that party to try and recover the money from the other for their share. I fail to see why the OP's daughter won't sue the ex, especially as the OP seems to has plenty of details of the ex's financial debacle.

pvt

No I can't provide evidence, and I'm not sure what form you would expect such evidence to take anyway.

There have been threads I can recall here on MSE where joint borrowers have reached such agreements with banks, but I can't be arsed to search and find them.

Where a bank believes it has a good chance of recovery by pursuing the parties jointly and severally, then I would expect they wouldn't agree to a split. But where the two parties are saying they will pay a mutually agreed share or the debt so long as as the bank agrees to split it, then pragmatism can prevail.

I like Clive's idea of a poll here - but I sense a thrashing from the outcome....

Apples2

pvt wrote: »

But where the two parties are saying they will pay a mutually agreed share or the debt so long as as the bank agrees to split it, then pragmatism can prevail.

I don't believe that means the loan has been split in any way.
It just implies the repayments into the Loan account are derived from two separate accounts.
As long as full repayments are being made, I wouldn't think they care how many accounts throw money into it.

If either contributor should fail to make the payment, the other would become liable to make up the shortfall so nothing really changes.

Thrugelmir

jonesMUFCforever wrote: »

Sorry but with Joint and several liability they do not need to compromise - they can go after one or both - they don't care if one person has half the money or not.

For any business there's a point when chasing and collecting bad debt becomes uneconomic. So lump sum settlement now is better than £50 per month repayments for 30 years..........

I only highlighted this as an option. Without knowing all the circumstances. Possibly not one that's worth pursuing.

jamesd

The young person has quite a few options. Bankruptcy, IVA or perhaps DMP. Also some settlement agreement.

Assuming this is an unsecured loan bankruptcy would eliminate their liability to anything remaining after bankruptcy.

An IVA would leave them with only partial liability, whatever the IVA covers. It's quite common for creditors to accept only 50-60% of the debt being repaid over say ten years.

When faced with those alternatives, creditors might instead accept 50-60% immediately as a full and final settlement of the obligation of this person towards the debt. They could then continue to chase the other person for the remainder. Those who doubt that creditors enter into such agreements need to consider the alternative: the creditor being forced by insolvency law into possibly accepting less or the same amount but over a longer time.

HaSBeenConsolidated wrote: »

Why should the banks be allowed to ruin young peoples lives by tying them into life-long indebtedness by providing them with Loans they can't afford to repay?

Because the young person asked them to and it appears that they could afford it at the time of application.

The young person may not have had a clue what they were doing and maybe they asked their parents and their parents gave them the wrong answer as well but that's a problem of ignorance. Martin is trying to fix that with his financial education in schools campaign, in the hope that children might know these pretty basic things by the time they leave school.

But you exaggerate, from the other thread:

HaSBeenConsolidated wrote: »

such a major commitment - in excess of £20,000?

That's not remotely close to being a lifelong debt unless the adult concerned is never going to have any higher income than benefits provided by society to support those who are unable to work. Even with that level of income it wouldn't be lifelong debt because DMP and insolvency are options. And insolvency in particular is intended to be used in cases where it is not practical to pay off a debt in a reasonable time.

Just in case you didn't know it, in a related area, an additional cardholder on a credit card account isn't the person who is liable to the card issuer for the debts that are built up. It's the person who signed the credit card agreement who is liable for it all. That person can take the other one to court in some circumstances but they are still the one the bank has to chase because the bank has no agreement with the additional cardholder and no way to chase them.

HaSBeenConsolidated wrote: »

Surely it's time to bring in some level of control to help reduce the level of abuse of the current passion for borrowing money at any cost?

There already is. Banks won't lend when a loan appears unaffordable for the incomes involved in repaying it. But banks are not responsible for unfortunate relationship choices. They leave those character judgements to the borrowers, while trying as well as they can to protect themselves if the person making the judgement gets it wrong, as happened in this case.