Money Moral Dilemma: Should we be guarantor for our relative?

Gavin83

PasturesNew wrote: »

Worst case scenario: They rent a house with others, they do a bunk from their course after month 2 and they leave the house, the other house tenants stop paying their rent are a bit wild and sub-let his room, then they have an end of year party where the police are called and the house has been trashed.

You COULD end up with the whole bill for the whole house for the year and all the repairs .... simply because you're the one with equity in your house and nobody else actually had a guarantor that's chasable.

Pretty much this. I wouldn't be a guarantor for someone unless you've a substantial amount of money sitting around that you don't know what to do with. I'm talking 5 figure sums here.

The rent for all the students in the property, plus extensive damage and costs, lost rent while repairs are taking place (potentially another years rent for all those students again) can come to an awful lot of money, especially if the uni is in a Southern city. This is of course worst case scenario but it could happen.

If for some crazy reason you still want to do it then at least get them to limit your liability like someone suggested.

happyinflorida wrote: »

Being a guarantor means nothing - we previously owned a property we rented out to a "working" couple who the agency said needed a guarantor as they'd been living and working abroad previously ( I think this was made up by these two to avoid their previous history being discovered).

The girl's father was guarantor and when she ran off and the man didn't pay the rent - he told me she'd cleared the bank a/c & their savings a/c, I contacted the father for payment. He didn't reply, I didn't have a phone number so I sent a letter by recorded delivery. He then replied stating he wasn't prepared to pay anything!

I took legal advice & was told I'd have to take him to court & without knowing his finances it could prove to be a complete waste of time if the court were convinced he couldn't pay - so I was left with money owing & damage to the property which I couldn't get anything back for as their measly one months rent deposit was used for paying the rent when the man then gave notice - a complete nightmare.

I would not be a guarantor for anyone apart from my own children who I know and trust.

Did you at least do some detective work to find out if he owned any assets, if he worked, etc? Not full proof but for a few hours and a small sum of money you could have worked out if it was worth pursuing.

This is of course a risk for any court case though.

happyinflorida wrote: »

NOOOOOOOOOOOO - Please be aware that a lot of the content of these programme's are totally inaccurate in law - they are being put out there to frighten people and make them think they have to let in the bailiffs when legally you DO NOT unless they are council bailiffs who are coming for payment for unpaid council tax - that is a different matter and must be paid, never ever don't pay council tax as they have more laws protecting them and different bailiffs! We are very un-educated in this country about these sort of things and programme's like these are a disgrace.

It angers me greatly when bailiffs call the police to attend with them and the police force people to open their doors and let the bailiffs in, the police are paid by us to protect us, they are not paid by the bailiffs at all and should not be working for them or helping them.

Do not ever open your doors to bailiffs or the police - also lock all your windows and back doors if you are expecting bailiffs as they have the legal right to enter a property through an upstairs window if it's been left open! Be aware.

Always answer court papers and go to the court hearing. Present your bank statements proving you cannot pay the debt, show proof of your income and bills that you have to pay which are rent/mortgage, council tax, water - both if you have two bills, gas, elec, food & any other essentials.

If you have a car on HP which is essential for you to get to and from work, include that. Petrol/diesel, car tax, insurance, all the essentials - but if you can travel to and from work using public transport and it works out cheaper it won't be allowed.

If your debt is sold on to a debt collection company - you've won and don't have to pay it because the collection company has paid your debt for you!! lol You have no legal agreement with them, you didn't take a loan out with them and you don't owe them any money - that's quite funny when that happens and a person is legally aware of the law, never write to them, do not speak to them and never, ever make a payment to them as that proves you accept the debt and then you're up the creek again!

If a debt is older than 6 yrs it's considered out of date and you no longer owe the money, as long as you haven't contacted the company or made any payments towards the debt in that time.

Or you could just try paying your debts and then you won't have to deal with them at all. I find such advice on how to avoid money you owe disappointing. Way too many people trying to avoid their responsibilities these days. Debt isn't just going to go away, no matter how much you wish to bury your head in the sand.

If you truly have no assets then obviously it can't be paid. However in this situation you need to accept you'll likely be declared bankrupt.

Maye101

AnotherJoe wrote: »

True but probably doesn't apply to someone who has let things get to a point where they have to ask a relative seemingly out of the blue as well and haven't arranged things such that they don't need a guarantor

Just to show the other side, sometimes landlords just demand guarantors no matter what the tenants circumstances. I am a professional working full-time with a salary at least 3 times my parents ( mum works part-time and dad is retired) I was still required to have a guarantor in spite of this. This was because I wasn't a home owner. Not sure how many home owners they get wanting to rent where I live - but still!

My parents have been my guarantor for 6 years, throught my time at uni and still now. They have never paid a penny in rent for me. I have always done it myself - even when it was tough! My point is that it depends on the individual circumstances and the people involved. If you don't think 110% they'll pay the rent no matter what then my answer would be NO!!!

WibblyGirly

Long time reader first time poster!

I'm a mature student and I went part time at my job. As a mature student without a full time position the person will be able to get the full amount of loan/grant which is about £7500. This would be used towards their rent. I worked out I'd have more money going to a brick uni as a full time student than staying in full time low paid work and doing an OU degree which I would likely struggle with due to the work load.

We're not all 'perpetual students,' some of us decided to actually change our lives instead of limping along in awful dead end jobs.

Peter333

happyinflorida wrote: »

NOOOOOOOOOOOO - Please be aware that a lot of the content of these programme's are totally inaccurate in law - they are being put out there to frighten people and make them think they have to let in the bailiffs when legally you DO NOT unless they are council bailiffs who are coming for payment for unpaid council tax - that is a different matter and must be paid, never ever don't pay council tax as they have more laws protecting them and different bailiffs! We are very un-educated in this country about these sort of things and programme's like these are a disgrace.

Do not ever open your doors to bailiffs or the police - also lock all your windows and back doors if you are expecting bailiffs as they have the legal right to enter a property through an upstairs window if it's been left open! Be aware.

If your debt is sold on to a debt collection company - you've won and don't have to pay it because the collection company has paid your debt for you!! lol You have no legal agreement with them, you didn't take a loan out with them and you don't owe them any money - that's quite funny when that happens and a person is legally aware of the law, never write to them, do not speak to them and never, ever make a payment to them as that proves you accept the debt and then you're up the creek again!

If a debt is older than 6 yrs it's considered out of date and you no longer owe the money, as long as you haven't contacted the company or made any payments towards the debt in that time.

Gavin83 wrote: »

Pretty much this. I wouldn't be a guarantor for someone unless you've a substantial amount of money sitting around that you don't know what to do with. I'm talking 5 figure sums here.

The rent for all the students in the property, plus extensive damage and costs, lost rent while repairs are taking place (potentially another years rent for all those students again) can come to an awful lot of money, especially if the uni is in a Southern city. This is of course worst case scenario but it could happen.

If for some crazy reason you still want to do it then at least get them to limit your liability like someone suggested.

Or you could just try paying your debts and then you won't have to deal with them at all. I find such advice on how to avoid money you owe disappointing. Way too many people trying to avoid their responsibilities these days. Debt isn't just going to go away, no matter how much you wish to bury your head in the sand.

If you truly have no assets then obviously it can't be paid. However in this situation you need to accept you'll likely be declared bankrupt.

Totally agree with Gavin. I am gobsmacked at Happy Florida's lackadaisical attitude towards owing money and debts, and how hilarious they seem to find it that you can just 'ignore' your debts.

You do know happyflorida do you not, that your credit record will be shot to hell if you just ignore your debts and let them be chased by a debt collector? Try getting insurance, or a loan, or a catalogue, or a store card; forget it matey! Ain't gonna happen!

What's more, how can anyone LIVE like this? Being chased for debts that they can't be bothered to pay? (Because HEY, why SHOULD they pay 'em?!!! Let some other mug pick up the tab!)

I am also shocked at how little you seem to know about bailiffs, and the power they have, once they have a court order.

What's more, you contradict yourself when you say 'bailiffs have no right to enter unless it's for unpaid council tax' (WRONG by the way! There are multiple reasons as to why bailiffs would be allowed to enter your property,) and then in the next breath, you said bailiffs have a legal right to enter the property; Make yer mind up!

Tinxmum

Relative or not if they default in any way you'll be the one to suffer.
Don't go there.

AnotherJoe

WibblyGirly wrote: »

We're not all 'perpetual students,' some of us decided to actually change our lives instead of limping along in awful dead end jobs.

Good for you but presumably that included making arrangements such that you didn't need to impose on a relative.

WibblyGirly

AnotherJoe wrote: »

Good for you but presumably that included making arrangements such that you didn't need to impose on a relative.

Yes that is true. I got my house with my partner while I still worked full time so the letting agents did not ask for a guarantor. I knew my change of circumstances but they didn't need to know as I'd worked out my costs so everything was covered, even if he left me I could just about manage this house on my own.

Tattie

Only do it if your prepared to pay if it all goes wrong. Please don't do it!

ViolaLass

I've had a guarantor three times, once in my mid 20s (the LL didn't want six months paid up front, I had only just returned to the country so I didn't have a job yet).

I'm very grateful to all 3 relatives who stepped in. It cost them the time to read the contract and sign it, no more.

Yes, it's risky but not everyone is a leech. You know your family.

Prothet_of_Doom

happyinflorida wrote: »

Being a guarantor means nothing - we previously owned a property we rented out to a "working" couple who the agency said needed a guarantor as they'd been living and working abroad previously ( I think this was made up by these two to avoid their previous history being discovered).

The girl's father was guarantor and when she ran off and the man didn't pay the rent - he told me she'd cleared the bank a/c & their savings a/c, I contacted the father for payment. He didn't reply, I didn't have a phone number so I sent a letter by recorded delivery. He then replied stating he wasn't prepared to pay anything!

I took legal advice & was told I'd have to take him to court & without knowing his finances it could prove to be a complete waste of time if the court were convinced he couldn't pay - so I was left with money owing & damage to the property which I couldn't get anything back for as their measly one months rent deposit was used for paying the rent when the man then gave notice - a complete nightmare.

I would not be a guarantor for anyone apart from my own children who I know and trust.

I am both a guarantor to my student daughter and a landlord. My Tenant (and there's probably a thread about it on MSE) did not meet the income criteria, because she didn't want her partner on the Tenancy agreement, offered her Dad up as a guarantor. I did a full referencing check, which included credit check and 2 years of his self -employment accounts. I also paid for a land registry check to check that he owned the house he lived in, and I made sure that the paperwork that was signed would hold up in court. Should she default, I would chase him for the money, even if it turned out that he had no money. I'd rather have them both with a CCJ against their names and get 12p a week, than let him off Scott-free.
On the other hand, the agents I have dealt with regarding my kids student rentals have not really understood the implications of the law. I've been emailed a link by one, without a copy of the tenancy agreement, to fill in an online form. Without a witnessed deed, that makes it worthless.

My question for the OP is this. What is the alternative ? Say no and see what happens ? The requirement might go away. Or said student might have to lodge in someone's house where the live in landlord has greater rights to remove the lodger.