Guarantor on a loan

HannahCF

A few years ago my brother took out a loan from a company for around 6k and my mom agreed to be a guarantor. At the time she was a home owner and they accepted her. Fast forward a few years and my mom is no longer a home owner and is currently in receipt of disability benefits. The monthly payments of the loan is £179. Her monthly income is £868 - she has her own debts to pay aswell as her every day bills and is currently not in the position to pay the extra £179 a month.

My brother is a bit of a lost cause at the minute and is a gambling addict - taking his money out of his account as soon as he gets paid and convinces himself he's going to double it! Then none of his bills are getting paid and the loan then leaves my moms account - leaving her short each month and in even more debt as she is struggling to make her own payments (she is trying to reduce her own debt).

Does anyone have any advice on what she can possibly do?
Thanks in advance.

Gambler101

Either talk or knock some sense into your brother.

If I had a brother who did that to my mum every month he would not be walking im telling you!

HannahCF

My brother is a waste of space. He has been spoken too so many times, told so many times... he is an addict and literally doesnt care about anyone else but himself. I have cut him off and he is making my mom ill with stress because she know's she cant afford this loan and she's also worried about the mess he will get himself into as he owes money to a lot of different people.

Caz3121

how long is left on the loan? you mention it was a few years ago so hopefully it will be ending soon

HannahCF

I'm not sure. I asked my mom and she said he took the loan out about 2-3 years ago. It would be a high interest loan though as he had taken out a few pay day loans at the time and needed that loan to pay off lots of little ones.

AndyPix

Your brother sounds like a nice bloke ...


As far as your mum is concerned, this is her debt unfortunately.
That's what being a guarantor is !!


Perhaps she could do with speaking to the likes of Stepchange ?

TheEffect

HannahCF wrote: »

I'm not sure. I asked my mom and she said he took the loan out about 2-3 years ago. It would be a high interest loan though as he had taken out a few pay day loans at the time and needed that loan to pay off lots of little ones.

If you mum was a home owner with a decent credit rating, she would have been better getting the loan in her name at a decent rate. Basically it's a win win for the loan company if they lend your brother a high interest loan, secured against your mums decent credit rating.

There's not much that can be done now, apart from talk to the loan company, explain your situation, and see if they are willing to offer anything such as frozen interest or reduced monthly payments.

maninthestreet

Can you help your mum with these loan repayments at all?

Sparx

I think you/your mum are best to call the loan company, ask what the remaining balance / number of payments is. Then you can hopefully come to a sensible arrangement to pay it off.

E.g.. possibly a 0% purchases or money transfer credit card? Or help your mum with any savings/cash you may have personally? Just some ideas to think about.

Oh, and then definitely keep the relationship cut with your brother. Absolute waste of space and I despise people like him, using mum as guarantor and giving zero *****...

National_Debtline

Hi HannahCF


Unfortunately your mum is liable for the loan as she agreed to be the guarantor. She needs to start by completing a statement of affairs (SOA) to see whether she can afford her normal household bills and all of her debts (including the guarantor loan). You may find it helpful to post this on the Debt-Free Wannabe board.

http://www.stoozing.com/calculator/soa.php

If she can’t afford all the debt repayments she needs advice from one of the free debt advice agencies. She may have a number of options to make the payments more manageable or even have the debts written off. I hope this helps.

Susie
@natdebtline