Partner agreed to default with bank and it's affected my Credit Rating

Popsuruncle

Hi all


I'll try and keep this short


Back in 2012 I (stupidly) took out a joint loan with my girlfriend so she could pay off her credit card debts - we took it out jointly as her credit rating wasn't great. But she always made the payments and I have had nothing since to do with it.


Then, towards the end of 2013 we broke up and I've thought nothing more of it.... Until June 2015 when I did my Credit check and discovered the loan went into Default in October 2014, which is obviously impacting my Credit rating :mad:


I have since spoken with the Bank and they say that in my ex missed a few payments and then in October said she couldn't afford payments, so they agreed for her to pay interest only for one year... I have complained but they just keep saying it's my responsibility...


I'm wondering the following:


Can the bank make these kinds of agreements without both parties, as it seems harsh they would put me in default when they never even asked me for the money?


Is it worth me settling the loan and putting a NOC on my Credit Report? It's quite substantial so I don't want to, but if it will make a positive difference then I will.


Any advice would be very well received. I was just about to look at getting a Mortgage and am really worried this will screw me over for the best part of 5-6 years!

HappyMJ

Joint loan....joint responsibility for making the payments on time for the duration of the agreement. It outlasts the period of the relationship. You didn't make the payment so your credit is showing a default. You can't do anything about it now as you agreed to make the payments when you took the loan out.

Now about fixing it. You could ask the bank if you clear the arrears it if it could remove the default and you'll resume the payments...they might agree. You'll then need to chase the ex for the cash...but she's in an arrangement to pay so won't have any money and you won't be able to get money out of her if she has none.

Tip for future...never take out joint debt with anyone unless you've got some security covering that debt such as a house....i.e a mortgage.

If she were to go bankrupt the bank can just ask you for full payment.

MEM62

Popsuruncle wrote: »

Hi all


I'll try and keep this short


Back in 2012 I (stupidly) took out a joint loan with my girlfriend so she could pay off her credit card debts - we took it out jointly as her credit rating wasn't great. But she always made the payments and I have had nothing since to do with it. She would have an incentive to keep up repayments while you are still together.


Then, towards the end of 2013 we broke up and I've thought nothing more of it.... Until June 2015 when I did my Credit check and discovered the loan went into Default in October 2014, which is obviously impacting my Credit rating :mad:


I have since spoken with the Bank and they say that in my ex missed a few payments and then in October said she couldn't afford payments, so they agreed for her to pay interest only for one year... I have complained but they just keep saying it's my responsibility... Yes it is, it is a JOINT loan and the loan agreement would have made your responsibilities and liabilities clear. Your responsibility to the lender does not end because your relationship did.


I'm wondering the following:


Can the bank make these kinds of agreements without both parties, as it seems harsh they would put me in default when they never even asked me for the money? Would you have paid it?


Is it worth me settling the loan and putting a NOC on my Credit Report? It's quite substantial so I don't want to, but if it will make a positive difference then I will. You could do. Settled will be viewed more positively than defaulted and as time passes the impact in the way that potential lender view you will lessen. If the default remains it will be more of an issue.


Any advice would be very well received. I was just about to look at getting a Mortgage and am really worried this will screw me over for the best part of 5-6 years!

It will have an impact on your mortgage application. If you are considering a mortgage then I suggest that you have a conversation with a broker at an early stage