Guarantor Loan

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Shirl02
Shirl02 Posts: 5 Forumite
in Loans
Hi All

My brother was coerced in acting as a guarantor for a loan by his daughter, which she topped up over a period of time and now stands at £9000. She has now stopped making payments and cut off all contact with my brother and he is now being chased for the money. He is on benefits and was at the time when loan was taken out and false info was given regarding employment. He does however jointly own his current house with me and they are threatening him with putting a charge on the property. My brother never electronically signed up to the loan this was done by his daughter although he verbally agreed to it. I have written to loan company informing them of my brother’s financial position and asking them to stop action and interest charges and we are waiting a formal response. It is unlikely my brother will be working again for the foreseeable future and I am not sure what next steps to take. Is he still legally liable if he did not electronically sign up to loan? Any advice would be appreciated on what I need to do to prevent charge on his home. Thanks
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  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    A verbal agreement is still an agreement, so he is still liable.

    It's unlikely he can avoid the charging order, if he's unable to make payments.
  • BrassicWoman
    BrassicWoman Posts: 3,203 Forumite
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    I doubt he was coerced by the legal definition; maybe persuaded.


    Did they pay the money into his account to pass on to daughter? That is the usual way. Can you check please?
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  • DCFC79
    DCFC79 Posts: 40,598 Forumite
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    OP are you able to take out a loan to help your brother out ?
  • Shirl02
    Shirl02 Posts: 5 Forumite
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    Yes the money was paid into his account and immediately transferred to his daughter
  • Shirl02
    Shirl02 Posts: 5 Forumite
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    I am not in a financial position to take out a loan on his behalf. His daughter and partner are both employed and are in a position to make payments but are just refusing to do so.
  • somethingcorporate
    somethingcorporate Posts: 9,449 Forumite
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    Shirl02 wrote: »
    I am not in a financial position to take out a loan on his behalf. His daughter and partner are both employed and are in a position to make payments but are just refusing to do so.


    Unfortunately this is exactly the point of guarantor loans. The company expect the person taking the loan to default and hence it falls to the guarantor to cover the debt.


    If you could get another loan to cover it it would likely be cheaper in the long run. Otherwise, there is unlikely anything you can do to avoid this debt.
    Thinking critically since 1996....
  • fatbelly
    fatbelly Posts: 20,578 Forumite
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    They can't just 'put a charge on is property'. They first have to start a court claim, to which he can offer payment, resulting in a ccj payable in instalments. Most lenders will be ok with that as long as it clears the debt in a reasonable period.

    If he defaults then they will look to enforce the ccj which in most cases means bailiffs in the first instance.

    If they go for a charging order they would only be able to place a restriction on the property, not a full charge, as the house is jointly owned.

    If he wants to complain about the loan there is guidance here

    https://debtcamel.co.uk/amigo-complaints-by-guarantor/
  • BrassicWoman
    BrassicWoman Posts: 3,203 Forumite
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    Shirl02 wrote: »
    Yes the money was paid into his account and immediately transferred to his daughter


    I'm afraid he's therefore no real grounds for complaint. He passed it over of his own free will, after time for reflection.


    Sorry.


    If he repays he can then go after her for the money, if she has any. Small claims court is the most cost effective way. But first, he needs to repay the debt.


    A charge on the property will likely just sit there until he dies...
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  • Willing2Learn
    Willing2Learn Posts: 6,294 Forumite
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    fatbelly wrote: »
    If he wants to complain about the loan there is guidance here

    https://debtcamel.co.uk/amigo-complaints-by-guarantor/
    This would be the first option I would consider. :)
    Shirl02 wrote: »
    He is on benefits and was at the time when loan was taken out and false info was given regarding employment.
    They should have asked for evidence of his income and expenses. They should have known he was on benefits at the time, unless your brother submitted false documents to prove employment or the lender failed to request documentary evidence. They should also have checked his credit file to see if there were any other debts or affordability issues
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • BrassicWoman
    BrassicWoman Posts: 3,203 Forumite
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    https://www.amigoloans.co.uk/assets/downloads/Amigo_Loans_Why_Be_A_Guarantor.jpg
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