co-signed loans

ablokeonabike

Hi,

I wonder if anyone can offer any suggestions. I'm posting on behalf of my Mother-in-law who was widowed about 4 years ago.

Her husband took out a couple of loans, for an unknown reason (my wife has suspicions regarding some vices, but that's speculation), and asked her to co-sign them but without giving her the details.

He subsequently passed away intestate. Whilst the mortgage and other debts were paid off by the life insurance, these loans weren't and continue to run. She has been unable to work since and these are taking a sizeable chunk of her monthly income - of her £700/mo income, a good £400 is paying these loans. She is receiving some assistance from her children, but this is an untenable situation.

I've no information on the loans at this time, apart from the fact that they appear to be unsecured and are co-signed (but it's unclear whether she's a guarantor or tied in some other way).

Any thoughts as to a route whereby the outgoings can be reduced (or, indeed cancelled)? My concern these days is the ease at which a creditor can force a charge/sale of the house, which is something we really want to avoid - once upon a time I would have suggested playing hardball, but creditors obviously have a bit of a nuclear option at their disposal.

I don't know what, if any, contact has been made with the lenders - my wife and I had a chat with her about this and some PPI issues (if anyone knows anything about claiming PPI on behalf of a deceased's estate, do point me in the right direction!) and I said I'd make some enquiries for her.

longtermplanner

She (or rather you - she can write a letter to each of the lenders saying she gives you full authority to deal with all matters relating to these loans - enclose this letter with any letters that you right) has to find out about these loans - how much is outstanding, the rate of interest and whether they are joint loans or she has guaranteed them. "co-signed" is not a legal term, so until you know what is happening it is hard to be definitive.

It sounds as those she did know she was signing up to a loan agreement, and she has been making payments since her husband died, so it's going to be hard to argue that she was either coerced or didn't realise what she signed. On that basis it seems unlikely you will be able to get them cancelled.

It's very rare for a creditor to be able to force a sale of a house, especially if the debtor is making some payment. If she can't afford £400 a month, then could she afford say £50 or £100? If she could then she needs a Debt Management Plan. Best people to set one up for her is probably Stepchange http://www.stepchange.org/Howwecanhelpyou/DMPDebtmanagementplan.aspx - a charity.

longtermplanner

re your query about reclaiming PPI. I don't know much about this, but I would have thought it might be difficult, as one of the first things you have to do to reclaim PPI is explain that you were not aware of signing up to it or were misled about its suitability of similar. As the person that signed up is dead, I am not sure how it could be proved that this was the case.

Your local Citizens Advice may be able to advise?

jonesMUFCforever

If there is PPI on the loans don't cancel - claim on them as they will have life cover to clear the loans!