Amigo Loans - death of Guarantor

Lily-Rose_3

And this is the reason why I would never ever ever ever ever be a guarantor!

Being a guarantor is such a minefield. Literally. I mean FGS, a man is dead, and the loan company can take from his estate, if the person he was a guarantor for, defaults on their loan.

Makes me wonder why ANYone would be a guarantor.

cockneysean

You see, the thing is with guarantor loans is that officially the guarantor is the legal borrower. This is why the funds are initially transferred to the guarantor for them to then pass on to the beneficiary.

However, if the beneficiary of the funds has any morality about them they will continue to honour their payments. One thing I am unsure of though is that now that the guarantor has died, the estate might have no other choice than to settle the outstanding amount and then you would have to chase the beneficiary of the loan yourself.

Also, I do not want to seem cold, but just because someone dies it does not and should not relieve them or their estate from any financial commitments that they may have had outstanding upon their death.

Morality is a whole other issue though, and I hope for the sake of your family that the beneficiary of the loan does the right thing. I am sure they would not like it if they were put in such a nasty position. What is your gut feeling on the matter? Do you think that they are going to continue to pay. If they do not realise it themselves, don't clue them up on the legalities of it as it may give them ideas about getting out of it. If they are happy to continue making payments as they have been doing so far, then just let them continue to do so without rocking the boat. As they say, if it ain't broke, don't fix it!

With regards to getting legal advice, I would recommend starting with one of them online services as the cheapest initial option as going to a regular service will definitely be expensive. They do not understand compassion or anything like that, they are just bloodsuckers and will not care that someone's life has ended. Aside from that, could you not try approaching the deceased man's own family solicitor? He may be a little more understanding and provide you with some advice free of charge. I am afraid that it is industry standard practice with these guys to charge using the six minute thing, I have seen it done before when a relative of mine was seeking some legal advice.

I hope some of the above has helped you to make some decisions in this difficult time.

SuperAllyB

cockneysean wrote: »

You see, the thing is with guarantor loans is that officially the guarantor is the legal borrower. This is why the funds are initially transferred to the guarantor for them to then pass on to the beneficiary.

...

When I initially posted, this was the bit that I hadn't realised. I have never had any possible interest in guarantor loans either as a borrower or guarantor. I just assumed that the guarantor only assumed liability if the borrower missed any payments - silly me!

[Deleted User]

jonesMUFCforever wrote: »

Any debts of the estate have to be paid off first - then with whatever is left is distributed as per will etc.

Actually, debts are part way down the list.

First to be paid is the funeral, followed by any tax liabilities (eg. HMRC, Council Tax), followed by secured debts (eg. Mortgage), and finally unsecured debts, which would include the Amigo loan.

By the time you get to the unsecured debts, it's quite possible there'd be nothing left, meaning Amigo would get nothing.

[Deleted User]

cockneysean wrote: »

Also, I do not want to seem cold, but just because someone dies it does not and should not relieve them or their estate from any financial commitments that they may have had outstanding upon their death.

Dying does, of course, relieve you of liability for your financial commitments, hence why the estate (if any) has to settle them.

OP. If it's not being too nosy, could I ask how the value of the estate compares to the funeral, tax and secured debt liabilities?

Bantex_2

Bedsit_Bob wrote: »

Actually, debts are part way down the list.

First to be paid is the funeral, followed by any tax liabilities (eg. HMRC, Council Tax), followed by secured debts (eg. Mortgage), and finally unsecured debts, which would include the Amigo loan.

By the time you get to the unsecured debts, it's quite possible there'd be nothing left, meaning Amigo would get nothing.

OP does refer to beneficiaries, so it is a fair assumption that there is expected to be something left.

sinizterguy

Lily-Rose wrote: »

I mean FGS, a man is dead, and the loan company can take from his estate, if the person he was a guarantor for, defaults on their loan.

Why is this wrong ?

Whether the individual is dead or not, if he has outstanding debt on credit cards, for example, it will come out of the estate.

In this case, it's a potential for an outstanding debt. Once it becomes as outstanding debt, if the borrower defaults, it is treated the same as any other outstanding debt.

If the borrower had borrowed the money without a guarantor and owed the company money, it would come out of their estate. Nobody posts 'FGS, the man is dead and the company wants their money back.'

No outrage is necessary if you think about it.

Of course, it is your personal choice whether you want to be a guarantor or not.

System

Bedsit_Bob wrote: »

Actually, debts are part way down the list. ??

First to be paid is the funeral, = a debt

followed by any tax liabilities (eg. HMRC, Council Tax) = debts

followed by secured debts (eg. Mortgage),= debts

and finally unsecured debts, which would include the Amigo loan. = debts

Everything you mention IS a debt but with differing priorities of settlement

[Deleted User]

OK !!!!!!.

You are correct, that they are all debts, but I think you know what I mean.

Amigo are way down the list, being second to last, just before those who will inherit what (if anything) remains of the estate.

cockneysean

Bedsit_Bob wrote: »

Actually, debts are part way down the list.

First to be paid is the funeral, followed by any tax liabilities (eg. HMRC, Council Tax), followed by secured debts (eg. Mortgage), and finally unsecured debts, which would include the Amigo loan.

By the time you get to the unsecured debts, it's quite possible there'd be nothing left, meaning Amigo would get nothing.

Bob, do you have a link where this information can be found? I would be very interested to have a read.