Loan guarantor

barnsley_chopper

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

Dobbibill

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.

DCFC79

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 ?

Pixie5740

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.

AndyPix

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 shoulders

Clive_Woody

Dobbibill wrote: »

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.
.

The second bit is pretty much what I was going to say. If your son defaults your wife is required to make payments, if she cannot or will not make these then her credit file will be trashed and if you are financially linked to her (joint account, mortgage, etc) then you may also find it difficult to get credit in the future.

-taff

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.

PeacefulWaters

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.

bargainbetty

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.

abuttyout

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?

Cheers

Fireflyaway

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.