Amigo Loan Guarantors - Taking your sister to court

CumbrianWolf

Hoping someone, anyone can provide me with any advice (for a saga which to us has felt like an episode of EastEnders)

Couple of year back my sister-in-law and then partner got into some serious financial bother. She had collected thousands of pounds from families by operating for ‘Park’ and the park voucher scheme (families putting money behind typically for Christmas vouchers). Only due to her own money problems and partner trying to setup a business (which they thought would repay the money) they delved into the money they had taken for the park vouchers.

Later, families started asking for their vouchers but they money that was meant to go to park to be redeemed as vouchers was spent!

They were denied access to any loans to cover the shortfall due to poor credit, and as a last resort we were approached to be a guarantor for an Amigo Loan for around £10,000

My wife and I felt our hands were almost tied, from my wife’s point of view her sister was going to go to jail, her niece would be put into care and the it would be all over the local papers (Girl Steals thousands from local families’ Christmas funds) and the family name would be tarnished. We sat down with my sister-in-law and partner and looked at all their finances and helped, my sister-in-law was at rock bottom, and even attempted to kill herself. Reluctantly we agreed to be guarantors.

The loan was paid fine for the first year, however my sister in law and partner then split up. He was the bread winner as she looked after the kids. Regrettably his name wasn’t on the Amigo loan so, we assume this is why he is seemingly taking no responsibility for it even though it is really his debt as well.

We have had to cover the loan as guarantors for the best part of a year now, meanwhile my sister-in-law has shown little remorse or even paid a penny towards her debt. At the same time she can still have sky TV installed, get her hair and nails done and go on nights out getting trollied. As you might expect, a family rift has ensued and My wife and her sister are not on good terms, and only keep the peace so that our son and cousin can see each other.


Currently we are, as guarantors, committed to paying off her debt, another £8,000 remains, and that is if it is paid off in a lump sum. If paid of monthly, with their APR it would be more like £12,000-£14,000


So, I am looking for some advice.

We are aware we can pay off the debt ourselves (float it on credit) and take her to small claims court to recover the monies. Amigos are right behind us on this and in their words ‘she wouldn’t have a leg to stand on’ and they would provide us all the supporting statements etc

I presume she would be forced to repay to cover all our losses, and interest we had accrued

Would she be forced to cover our legal fees if we won?



My main question here is even if the court ruled in our favour (which they unquestionable will), how would the money be recovered if she lives off the state/child benefits presently. I presume there would be some repayment plan put in place, but what legally binding thing would force her to pay it? Would it come out of her benefits?

Although she is looking for work (16 hours) our fear is she will jack that in if it meant she was only working to pay us back i.e. if she didn’t work she wouldn’t have to pay us back.

Any advice or thoughts would be greatly appreciate before we god down the avenue of paying the Amigo loan off and taking her to court.

[Deleted User]

The chances are not good that she would ever pay you back.

Her customers know she doesn't pay them back, Amigo knew that she wouldn't pay them back, and now you know it too.

That's not to say that you might not get a few quid out of her following small claims court action, but keep your expectations low. While she's on the benefits, I doubt you will get anything, or an occasional pound at most.

Gaz83

CumbrianWolf wrote: »

Hoping someone, anyone can provide me with any advice (for a saga which to us has felt like an episode of EastEnders)

Couple of year back my sister-in-law and then partner got into some serious financial bother. She had collected thousands of pounds from families by operating for ‘Park’ and the park voucher scheme (families putting money behind typically for Christmas vouchers). Only due to her own money problems and partner trying to setup a business (which they thought would repay the money) they delved into the money they had taken for the park vouchers.

Later, families started asking for their vouchers but they money that was meant to go to park to be redeemed as vouchers was spent!

They were denied access to any loans to cover the shortfall due to poor credit, and as a last resort we were approached to be a guarantor for an Amigo Loan for around £10,000

My wife and I felt our hands were almost tied, from my wife’s point of view her sister was going to go to jail, her niece would be put into care and the it would be all over the local papers (Girl Steals thousands from local families’ Christmas funds) and the family name would be tarnished. We sat down with my sister-in-law and partner and looked at all their finances and helped, my sister-in-law was at rock bottom, and even attempted to kill herself. Reluctantly we agreed to be guarantors.

The loan was paid fine for the first year, however my sister in law and partner then split up. He was the bread winner as she looked after the kids. Regrettably his name wasn’t on the Amigo loan so, we assume this is why he is seemingly taking no responsibility for it even though it is really his debt as well.

We have had to cover the loan as guarantors for the best part of a year now, meanwhile my sister-in-law has shown little remorse or even paid a penny towards her debt. At the same time she can still have sky TV installed, get her hair and nails done and go on nights out getting trollied. As you might expect, a family rift has ensued and My wife and her sister are not on good terms, and only keep the peace so that our son and cousin can see each other.


Currently we are, as guarantors, committed to paying off her debt, another £8,000 remains, and that is if it is paid off in a lump sum. If paid of monthly, with their APR it would be more like £12,000-£14,000


So, I am looking for some advice.

We are aware we can pay off the debt ourselves (float it on credit) and take her to small claims court to recover the monies. Amigos are right behind us on this and in their words ‘she wouldn’t have a leg to stand on’ and they would provide us all the supporting statements etc

I presume she would be forced to repay to cover all our losses, and interest we had accrued

Would she be forced to cover our legal fees if we won?



My main question here is even if the court ruled in our favour (which they unquestionable will), how would the money be recovered if she lives off the state/child benefits presently. I presume there would be some repayment plan put in place, but what legally binding thing would force her to pay it? Would it come out of her benefits?

Although she is looking for work (16 hours) our fear is she will jack that in if it meant she was only working to pay us back i.e. if she didn’t work she wouldn’t have to pay us back.

Any advice or thoughts would be greatly appreciate before we god down the avenue of paying the Amigo loan off and taking her to court.

Even if you win in court, if she doesn't have the means to pay (and demonstrates so to the court), you won't see a penny.

Lungboy

CumbrianWolf wrote: »

Any advice or thoughts would be greatly appreciate before we god down the avenue of paying the Amigo loan off and taking her to court.

It sounds like you need to bite the bullet, pay it off and forget it. You're going to be paying it off anyway so do it earlier and save a lot of cash. Small claims is cheap enough to get started if you want to try and scare the sister into coughing up something, but if she doesn't have it then they can't force her to pay.

TBagpuss

The court can look at her means and set a payment plan. For someone in receipt of benefits, this is unlikely to be more than £5 per week. I don't think it is automatically taken from hr benefits.

The only upside is that if you have a CCJ against her you can then apply to enforce it at a later time, it doesn't become statute barred after 6 years like the original debt, so if she were to start working once her children are older you could then seek higher payments.

However, if her credit and financial situation are as you say, she may well already have other CCJs.

It sounds as though neither the loan nor the original voucher scheme were in her ex partners name so he has no liability.

-taff

Forget about it, just pay the loan off and chalk it up to experience. And never EVER be a guarantor again.
As above, if she's on benefits, what's the point in taking her to court? I suppose you could go the whole hog and do it just to make her bankrupt which will ensure she won't get credit for a long time.

TBagpuss

Just to add, if you go via small claims you don't get to claim legal costs, although I think you can claim the court issue fee and interest on the debt. County court interest rate is 8% per year.

I suspect that you best option here would be to pay the debt off to save on the interest (if you don't have £8K available, then can you get a loan with a lower interest rate yourself? )

In terms of taking her to court, it depends whether you feel that his it worth it, bearing in mind you are unlikely to get the money back, but it may encourage her to pay a little, and might allow you to get a bit back letter on if her finances improve.

CumbrianWolf

Thanks so far for the comments.

If I didn’t make it clearer earlier the ‘park’ customers did get their money back by virtue of the loan paying them.


Assuming she is soon to be working 16 hours (she has applied for jobs) how is repayment set up post small claims courts, how if it all is it enforced i.e. if she would miss payments what happens? Would it come direct out of her salary or would she have to make manual payment.

If she is living the life of Riley with luxuries or possessions at home is there anyway legal way to recoup losses with debt collectors etc.


If she wasn’t in a financial situation now but in say 10 years’ time was I presume we could still revisit it then again, perhaps through the courts?

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Voyager2002

Just to add that you would not need a lawyer to use the Small Claims track to take her to court. There would be various court fees to pay, and these would be added to the amount she owes you. All in all it would cost you a few hundred pounds, and would mean that if she ever won the lottery or whatever you would be repaid all that is owed.


In the first instance the court would order her to make affordable payments out of her benefits (probably around five pounds per week). Should she fail to make these payments you could go back to court (more fees!) and obtain a "garnishing order" so that the money would be deducted from her benefits and passed on to you: IMHO the amounts would be too low to justify the expense.

Voyager2002

CumbrianWolf wrote: »

Thanks so far for the comments.

If I didn’t make it clearer earlier the ‘park’ customers did get their money back by virtue of the loan paying them.


Assuming she is soon to be working 16 hours (she has applied for jobs) how is repayment set up post small claims courts, how if it all is it enforced i.e. if she would miss payments what happens? Would it come direct out of her salary or would she have to make manual payment.

If she is living the life of Riley with luxuries or possessions at home is there anyway legal way to recoup losses with debt collectors etc.


If she wasn’t in a financial situation now but in say 10 years’ time was I presume we could still revisit it then again, perhaps through the courts?

As I posted just now, if she has a regular income then you can obtain a "garnishing order" so that the employer or whoever makes payments directly to you. If there is valuable "stuff" in her home then you can pay for bailiffs to visit her.

Potbellypig

Doesn't look good.

Best case: you win in court and get a very small amount of her disposable income (if any).
Worst case: you lose in court, have to pay the loan anyway, and have court costs to pay on top.

The harsh truth is that you have very little option but to pay it off.