Finance taken out for someone else...

john.burn

No no, I think you're pretty clear!

The amount was something like £3300 over 3 years with repayments of around £100 - £130 (not sure exactly). But the company has clearly made some sort of admin cockup and never started the direct debit payments (which they most certainly have had the paperwork for).

John.

Snaggles

Is it possible she has just got cold feet, wants the debt out of her name, and is using the mortgage as an excuse to 'force' your other friend into taking a loan out?

In reality, if your other friend decides to just dig his heels in and refuse to take out a loan, there is very little she can do about it. If you take a loan out in your name, you are responsible for making the repayments, no matter whether the loan was for yourself or for someone else.

It's a tricky one though, money does tend to be pretty good at breaking friendships up sometimes.

rollershade

yeah, moral of the story is as horrible as it sounds never lend your m8's large amounts of cash that you cant afford upfront, ie loans. I lent a friend 2000 and saw about 6-700 back, and now not friends, i guess we have to learn the hard ways sometimes

john.burn

Yeap, absolutely with the don't lend to friends but... they did. And, I'm kinda on the side of the ones who had the equipment as they got completely and utterly shafted after loosing a huge part of their lives by standing up for this person. They say what goes around comes around and it's currently coming around.

John.

natters_2

So what you are basically saying is - one friend took out a loan on behalf of another friend - the one that took out the loan has never been asked to make any payments by the loan company, so it could be an admin !!!! up that means she might never have to pay it back - so in effect she is skint and thinks what a great way to get a bit of extra dosh in time for christmas?

Yes the friends that had the equipment should pay the loan if and when the company asks for it, but at the monthly agreed rate of £110 - not the full whack just because they have fallen out.

wherediditallgo

john.burn wrote: »

Yeap, absolutely with the don't lend to friends but... they did. And, I'm kinda on the side of the ones who had the equipment as they got completely and utterly shafted after loosing a huge part of their lives by standing up for this person. They say what goes around comes around and it's currently coming around.

John.

I think that line is at the heart of this.

They've both been a bit silly. The person who took out the finance on behalf of the other was very short-sighted to do so - 3 years is far too long a time to be tied into something from which you receive no benefit, even more so when you're not sure of your own future & whether this loan might get in the way of your own plans. The person for whom the loan was obtained didn't play totally fair either - when they didn't hear anything about the repayments after a couple of months, they should have (a) chased this up, & (b) put aside the monthly repayments until they were claimed. Had they done this, they would have enough money saved by now to clear half the debt in one payment & bring it up to date, leaving the normal length of the agreement still to run. Reading between the lines, I suspect that the person who benefited from the loan didn't do as much as they could have to get the repayments on track, consciously or subconsciously partly because of feeling aggrieved over what had happened before.

They've both made the mistake of not having a legal agreement between them separate from the loan agreement with the finance provider. They should have had an agreement about what they'd do if circumstances changed, eg if one wanted to take on other finance during the course of the loan, what would happen if payments were late, what they'd do if the loan affected the credit file of the lending party etc. I don't see how the person who got the loan can insist on the other person getting a secured loan to pay off the debt in one hit. In fact, if they push the person too hard on this, they might find that they decide to say stuff the friendship & decide not to pay the loan at all. That will leave the other person having to pay off the loan themselves, & possibly taking legal action to recover the money from the friend they helped. Unfortunately, the friendship is probably shot to pieces for good now, because the person who got the loan is going to lose either way, even though they're not being very fair themselves.

Never lend money to friends or family that you can't afford to lose, & never commit yourself to something on behalf of someone else that may get in the way if your own plans/circumstances change.