Amigo Loans - death of Guarantor

SuperAllyB

A relation of my wife has died, and amongst paperwork we discovered he was guarantor for a friend's loan. We only have a couple of statements, not the agreement.

We have notified Amigo and they state that if the borrower defaults even now, then Amigo will have a claim on the estate. Doesn't seem right now that they have been notified of the death - how can a dead man incur a debt?

We will take advice from our solicitor (Scotland) at the start of the week, but does anyone know how things stand legally?

cockneysean

Amigo are correct that they will have a claim against the estate if the borrower defaults, however I am unsure of what the situation would be once the estate is disposed of.

You need to take advice on this as there is a possibility that now the guarantor has passed away, Amigo might be able to claim the full outstanding amount from the estate, as the debt is actually the responsibility of the guarantor and not the borrower, and in normal circumstances, all debts are cleared from the estate.

Consulting a solicitor is probably a wise move.

michael1983l

SuperAllyB wrote: »

A relation of my wife has died, and amongst paperwork we discovered he was guarantor for a friend's loan. We only have a couple of statements, not the agreement.

We have notified Amigo and they state that if the borrower defaults even now, then Amigo will have a claim on the estate. Doesn't seem right now that they have been notified of the death - how can a dead man incur a debt?

We will take advice from our solicitor (Scotland) at the start of the week, but does anyone know how things stand legally?

Unfortunately I think the debt was joint liability at the start of the loan when the agreement was made, so the debt is already incurred, meaning that Amigo do technically have a claim on the estate should the loan go into default. The morality of it is different, I believe it be immoral for Amigo to chase a guarantor for money who has passed away and the whole buck should stop with the debtor who received the funds.

However since when have banksters had morality

jonesMUFCforever

If Amigo has a claim on the estate - does not the executor of the estate have a claim for damages on the original recipient of the loan?


There is also an argument that a contract ceases on death - I would get Amigo to send you a copy - the details of what happens upon death of the guarantor should be on there.
Make sure it is the signed copy not a made up copy.

SuperAllyB

Certainly going to let the solicitor deal with it.

If the guarantee doesn't die with him and the borrower is aware then she will undoubtedly default as she doesn't get on with either the executor or any of the likely beneficiaries.

Thrugelmir

Most likely scenario is that the estate will have a contingent liability. That will remain unless the borrower substitutes the guarantor or is able to continue the agreement without the need for one. All of which may well hold up distribution of the estate.

Thrugelmir

michael1983l wrote: »

However since when have banksters had morality

Banksters are mere mortals. More people default on their debts than there there are crooked bank employees.

macman

SuperAllyB wrote: »

A relation of my wife has died, and amongst paperwork we discovered he was guarantor for a friend's loan. We only have a couple of statements, not the agreement.

We have notified Amigo and they state that if the borrower defaults even now, then Amigo will have a claim on the estate. Doesn't seem right now that they have been notified of the death - how can a dead man incur a debt?

We will take advice from our solicitor (Scotland) at the start of the week, but does anyone know how things stand legally?

Any estate can have debts. If someone who owes you money dies, why is it 'immoral' to claim them from the estate?
As this can hardly be a rare event, there must be some contingency in the agreement made.

NICHOLAS_2

I don't think it is worth paying a Solicitor. When you die, if you have outstanding debts, loan companies look to reclaim the debt from assets.

If the assets are divided up meaning the dead person no longer has anything in their name, then the borrower defaults, amigo would get nothing.

jonesMUFCforever

NICHOLAS wrote: »

I don't think it is worth paying a Solicitor. When you die, if you have outstanding debts, loan companies look to reclaim the debt from assets.

If the assets are divided up meaning the dead person no longer has anything in their name, then the borrower defaults, amigo would get nothing.

It does not work like that.
Any debts of the estate have to be paid off first - then with whatever is left is distributed as per will etc.
If the executor pays out knowing there are debts he/she will be personally responsible to cover them.

CKhalvashi

jonesMUFCforever wrote: »

If Amigo has a claim on the estate - does not the executor of the estate have a claim for damages on the original recipient of the loan?

I'd say that this would be the case.

It would have to be paid from the estate, then paid back to the estate by the defaulting borrower.

The debt and credit would be the same.