Help!!! Urgent - can guarantor have ccj???

msaver121

A family member helped out a very close old friend by helping her to pay to take out a loan to attend the first wedding of their eldest child based overseas. This friend initially asked my relative to help out and after a bit of reluctance my relative agreed in humble spirits believing that once the wedding was over, the friend would work hard to pay back my relative. Lo and behold when the time came the friend delayed in paying back the loan and did not consider the effects of the procrastination. The loan/credit company had given the friend a minimum amount required to start the repayments before the ccj would be enforced on the guarantor who is my relative.Eventually as the minimum amount was not paid on time my relative is now due to expect a ccj despite appealing the case to court on the initial basis of the arrangement.

PLEASE please can anyone offer urgent advice on how best to proceed??????? Thanks.

sourcrates

Hi,
Welcome to MSE.

I'm assuming this was a guarantor loan, with your relative acting as guarantor, is that correct ?

As harsh as it may sound, if that is the case, and the debtor has not paid, then your relative is 100% liable.

This is the big pitfall of a guarantor loan, they can be pursued through the courts for full payment, as though they were the debtor.

On what basis does he think he may not be liable for the debt ?

msaver121

Thanks for the response. From what I understand the friend borrowed some money from my relative and further took out a loan which my relative co-signed to agree that this friend would be solely able to successfully make the re-payments accordingly upon their return from the wedding. Furthermore my relative did not have any share or spend of this money borrowed.

However this friend did not make the initial re-payments required and hence came the threat that the guarantor was to now be penalised for the delayed initial payments. The disappointment came when the credit company gave the ultimatum within enough time for a low amount which the borrower ignored despite my relative urging her in order to avoid the subsequent ccj enforcement.

ViolaLass

I doubt your relative was signing to promise that their friend would keep up repayments - they were signing to promise that repayments would happen i.e. that the relative would make the payments if the friend didn't. That's the point of a guarantor loan.

They should have made sure they understood what they were signing. Did they read the contract in full?

fatbelly

msaver121 wrote: »

PLEASE please can anyone offer urgent advice on how best to proceed??????? Thanks.

Pay the ccj within 28 days to avoid it being recorded on your credit file.

In future, if a relative needs money and you want to help, either give them the cash or take out a loan in your own name to raise the cash, using info from this site.

Avoid guarantor loans.

sourcrates

When anyone "co-signs" a loan agreement, that effectively means if the person taking out the loan fails to pay, then the "co-signer" becomes liable to pay the full amount.

Thats why you have to be 100% certain anyone you "co-sign" for, is not going to renege on the deal, i don't think your relative has many options to be honest, as ignorance is no excuse in the eyes of the law.

indesisiv

A quick definition:
A guarantor is a person who agrees to repay the borrower’s debt should he or she default on agreed repayments.

The friend is defaulting on the payments, therefore as the guarantor she has to pay them. Simple.

Marktheshark

Does this "friend" have any assets ? Home, car ? Nice TV .
Suing her friend and sending bailiffs might be an option that could focus here to pay the loan payments.

timbstoke

Your friend's only option to avoid a CCJ is to pay the loan off. They can then get the money back from the person who actually wanted the loan in the first place, using whatever means they feel appropriate.

Tixy

Is your family member certain this has already gone to court and that a CCJ has been granted?

Presumably the loan company have your family member's address?
They would have written to her with court papers when they commenced court action (whether in just her name or in joint names).
Did that happen? and did she then receive a copy of the judgement?