Guarantor Help

MamaMoo_2

Hi,
Hopefully someone on here will be able to help.
In 2009 SIL's mom signed as a guarantor with a "micro finance" company for her sister.
Her sister subsequently stopped paying the debt in 2011.
Company have now contacted SIL's mom and are insisting she pays the debt.
SIL's mom is on benefits now due to redundancy, lives in a council house, and doesn't really have any assets.
Can anyone offer advice on what she can do? She's in no position to pay back this loan and was unaware that her sister had stopped making payments.

heartbreak_star

Sadly, as she is guarantor she is obliged to make the payments if the debtor does not.

Can she check through the paperwork?

HBS x

somethingcorporate

She'll have to come to some agreement to make repayment (or obviously default, if she hasn't already).

27col

Sounds like yet another person who had absolutely no idea as to what being a guarantor meant.

InsideInsurance

For all intents and purpose she took a joint loan out with her sister

The loan company will follow normal debt collection processes against one or the other or both of the sisters.

iolanthe07

This is awful for your sister-in-law's mum and is the reason why mostly the consistent advice on here is never to act as a guarantor. Try to bring some moral pressure on her sister to do the decent thing.

MamaMoo_2

heartbreak_star wrote: »

Sadly, as she is guarantor she is obliged to make the payments if the debtor does not.

Can she check through the paperwork?

HBS x

Unfortunately, she was never given any paperwork

spacey2012

MamaMoo wrote: »

Unfortunately, she was never given any paperwork

She would have signed a contract and been given a copy of this contract.

National_Debtline

Hello there,

As the other have already mentioned your sister-in-law's mother is just as liable as your sister-in-law. Here in the UK we have a rule known as the the rule of 'joint and several' liability. In a nutshell, this means that either party can be expected to pay the amount in full.

if your mother-in-law is on a low income she should consider completing a financial statement with a view to making a monthly offer of payment based upon what is realistically affordable. This can be as low as £1 per month. How much is the debt?

We have a number of sample letters on our website, these are designed to ask that interest and charges are frozen. You can find them here: https://www.nationaldebtline.org/EW/sampleletters/Pages/default.aspx

If you require any further help please feel free to ask.

Best wishes,

David @ NDL.

Gaz83

MamaMoo wrote: »

Unfortunately, she was never given any paperwork

If your sister-in-law required a guarantor to get a loan, the loan company wouldn't have released any funds without paperwork and a signature from the guarantor.

MamaMoo_2

Gaz83 wrote: »

If your sister-in-law required a guarantor to get a loan, the loan company wouldn't have released any funds without paperwork and a signature from the guarantor.

She had to sign a credit agreement, but was not given a copy to keep.