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Loan guarantor
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barnsley_chopper
Posts: 1 Newbie
in Loans
Just after a bit of advice.
Long story, won't bore anyone with the details, but my son is intent on purchasing a car via a bank loan or some other form of personal finance.
He has no creditworthiness & in the event he needs a guarantor which I strongly suspect he will, I've already pretty much told him "no chance", but unfortunately his far less financially astute mother may have different ideas.
Simple question, in the event she signs as a guarantor without my knowledge & he defaults on the payments, bearing in mind we're married & our property is in joint names, does that make me ultimately financially liable ?
Any opinions (ideally based on similar experiences !) greatly appreciated.
Cheers
Long story, won't bore anyone with the details, but my son is intent on purchasing a car via a bank loan or some other form of personal finance.
He has no creditworthiness & in the event he needs a guarantor which I strongly suspect he will, I've already pretty much told him "no chance", but unfortunately his far less financially astute mother may have different ideas.
Simple question, in the event she signs as a guarantor without my knowledge & he defaults on the payments, bearing in mind we're married & our property is in joint names, does that make me ultimately financially liable ?
Any opinions (ideally based on similar experiences !) greatly appreciated.
Cheers
0
Comments
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It makes her liable - she will need to make the payments or risk having her credit file trashed if she doesn't.
This could then have a knock on effect with you if you have joint financial products Eg - mortgage, joint current account etc.
Either lend him the money, take out a loan in your/her own name or tell him to find finance that doesn't require a guarantor. Guarantor loans are much more expensive - not worth the hassle IMHO.I’m a Forum Ambassador and I support the Forum Team on the Budgeting & Bank Accounts, Credit Cards, Credit File & Ratings and Energy boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
If you can't be the best -
Just be better than you were yesterday.0 -
Why is he intent on doing it ?
Can he not pay for it himself eg savings ?
Will he take care of insurance, get enough money for service, mot, tyres etc ?0 -
No you won't be financially liable. You aren't liable for your spouse's debts unless it is a joint debt with you and this wouldn't be a joint debt with you.0
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Maybe direct your partner to ahave a quick read on this forum of the MANY MANY threads
from people who have been in similar circumstances and now are crying for help on what to do
as they are lumbered with a debt - after the recipient made 2 payments and then dumped it on the guarentors shoulders0 -
It makes her liable - she will need to make the payments or risk having her credit file trashed if she doesn't.
This could then have a knock on effect with you if you have joint financial products Eg - mortgage, joint current account etc.
."We act as though comfort and luxury are the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about” – Albert Einstein0 -
Only she would be liable but her joint assets are obviouslyyours too, so in the event she doesn't pay, then she will either look to them or you for a means of payment.Non me fac calcitrare tuum culi0
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Risk of it ending up as a charging order against the house further down the line. So while unlikely to get to that stage, yes, it could impact you.0
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If she insists on helping him, suggest that she buy a car in her own name and let him drive it. He can make the regular payments and when the loan is repaid in full, she transfers it to him.
If he doesn't make the payment, she repossesses and sells the car to clear the debt.
He has to trust her to hand over the log book at the end... that's love and trust in finance.Some days, it's just not worth chewing through the leather straps....
LB moment - March 2006. DFD - 1 June 2012!!! DEBT FREE!
May grocery challenge £45.61/£1200 -
PeacefulWaters wrote: »Risk of it ending up as a charging order against the house further down the line. So while unlikely to get to that stage, yes, it could impact you.
Am I right in thinking ( off reading these forums ) that it wont be a charge, but only a restriction because its a joint mortgage?
Cheers0 -
Your wife would be liable but chances are if he defaulted then action against your wife could impact you by default. If bailiffs come and take goods from your house for example, or she gets a mark on her credit file and you later apply for a joint financial product such as a mortgage or joint car loan then it could be refused.
If my child asked me to be a guarantor I'd say no. Not because of a lack of trust, but just in case they did default due to illness or redundancy. The consequences could be severe on the relationship too.
Nobody needs a pricey car. £600 can get you a functional run around. Sometimes saying no is the kindest thing.0
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