Guarantor For A Friend and She Has Now Applied For A IVA

TigerBack

I'm a guarantor with Amigo loans, for a friend who has now told me she has now applied for a IVA, I understand she will be making repayments each month to an insolvency practitioner and part of the payment will go to Amigo Loans. Does anyone know where I stand in this case? Will the interest be frozen and I'm then liable for the outstanding amount each month.

Pixie5740

TigerBack wrote: »

I'm a guarantor with Amigo loans, for a friend who has now told me she has now applied for a IVA, I understand she will be making repayments each month to an insolvency practitioner and part of the payment will go to Amigo Loans. Does anyone know where I stand in this case? Will the interest be frozen and I'm then liable for the outstanding amount each month.

As your friend is not making the contractual payments, like Amigo knew she wouldn't, it falls to you. Amigo don't have to freeze the interest because you're on the hook.

normanna

Usually in an IVA creditors get pennies in the pound back. Amigo will come to you for payments and they won't freeze interest. Maybe you could consider taking out a loan yourself to pay Amigo back if you can get a lower rate as this could save you a lot of money.

TigerBack

Do you think it possible, If I Mention to Amigo that I may have to now consider taking a IVA out myself, which is a possibility. They would consider freezing the interest ?

John_G_Jones

TigerBack wrote: »

Do you think it possible, If I Mention to Amigo that I may have to now consider taking a IVA out myself, which is a possibility. They would consider freezing the interest ?

No, they would not.

If your situation is so bad that you need to take out an IVA then why did you take on this onbigation, and how did you pass the credit checks?

jonesMUFCforever

Threaten them with whatever you like but if your friend goes bust you take over the responsibility of repaying the loan -- some friend you have there.

TigerBack

John_G_Jones wrote: »

No, they would not.

If your situation is so bad that you need to take out an IVA then why did you take on this obligation, and how did you pass the credit checks?

My Credit Rating is Ok at this moment in time, with no arrears and no CCJ and I been making up the payments she as missed..
But I'm self employed and I do not know what the future holds, so I'm checking all my options.

SnowTiger

TigerBack wrote: »

My Credit Rating is Ok at this moment in time, with no arrears and no CCJ and I been making up the payments she as missed..
But I'm self employed and I do not know what the future holds, so I'm checking all my options.

It appears you become a guarantor without fully understanding what it entailed.

I suggest you make sure you understand what an IVA is and how it works before seriously considering one.

StepChange, Citizens Advice and MSE for starters.

None of us knows what the future holds. However, if it's likely you won't be able to maintain payments it's a good idea to tackle the problem now rather than leave it.

soolin

SnowTiger wrote: »

It appears you become a guarantor without fully understanding what it entailed.

I suggest you make sure you understand what an IVA is and how it works before seriously considering one.

StepChange, Citizens Advice and MSE for starters.

None of us knows what the future holds. However, if it's likely you won't be able to maintain payments it's a good idea to tackle the problem now rather than leave it.

OP, this is brilliant advice, please take heed of it.

Don't do something in the heat of the moment to be clever that may well impact your own credit and even business potential in the future.

MEM62

TigerBack wrote: »

My Credit Rating is Ok at this moment in time, with no arrears and no CCJ and I been making up the payments she as missed..
But I'm self employed and I do not know what the future holds, so I'm checking all my options.

Sadly, not an unusual post. There are many similar ones on these forums OP and it's a shame you did not read them before agreeing to be a guarantor.

If your credit standing was good enough for Amigo to accept you as a guarantor they will know that any threat of you entering an IVA is just hot air. Guarantor has a meaning. You have agreed that you would be responsible for the loan once your 'friend' inevitably defaulted. She has and now you have to cough up.

Personally, I do not like Amigo's business model. They effectively lend to people with good credit standing (the guarantor) at sub prime rates. Also, many guarantors are naïve in that they do not appreciate how bad their so called friend's financial position is. Let's face it, if they were not in dire straights they would not be taking an Amigo loan. The very fact that they need a guarantor loan should be the very thing that rings the alarm bells.

missile

Now you are on the hook for the loan and the interest.
If you have good credit rating, it would have been far easier and ultimately cost less for you to have taken out a loan and lent her the money.