Amigo loans - death of guarantor

Cmsmith

I currently have a loan with amigo. Last week I called to advise them my guarantor had passed away. They said were sorry to hear this, could you send in a copy of the death certificate and we will remove the guarantor from the account. Which I did. They advised me I would have sole responsibility for the loan and in an event which I defaulted, I would be solely responsible and they would seek court action, which would result in a CCJ. Fine understood. I then recieved a letter today requesting i provided them with the executor of the estate and upon the event I didn't pay, they would seek the funds from the estate. They also stated they had only removed the guarantor's details from the account, and not the guarantor themselves. Luckily all calls are recorded and I put in a complaint straight away as I had been quite obviously lied to regarding the process. I also combed through the guarantors terms and conditions, and I could not find anything about what happened upon the guarantor's death. So surely this threatening letter is illegal? They can't surely uphold this if there's nothing within the terms and conditions? Does anyone know legally were I stand with this? 

[Deleted User]

Legally, they can pursue the debt from the estate once you stop paying. They don't need to state facts which are already established in law.

So everything is in order.

Cmsmith

What law is this? Can you specify? Because there is usually two clauses within a guarantor loan. One states that upon death, the contract is broken and the guarantor has no responsibility and the second, the contract carrys on. Im obviously going to continue paying the loan, but what about upon the event of my death? 

jonesMUFCforever

In the event of your death -- Amigo will make a claim on your estate. If there is no funds in your estate they will see who the guarantor was. As he is deceased they may make a claim on his estate.
This is why they need to have details of the executors - to warn them not to pay out funds before the loan has been repaid.

If neither of you have any funds in your estates then Amigo are stuffed and would have to write the debt off.

sourcrates

Guarantees can be either divisible or entire -

Divisible guarantee:

This is a type of guarantee where the Guarantor continuously guarantees further obligations over the life of the guarantee.

Entire guarantee:

This is a type of guarantee where the Guarantor guarantees payment of one supply or loan only.

Can a death revoke a guarantee ? The simple answer is “Yes”. If the consideration of the guarantee is divisible, the guarantee can be revoked once notice of the death of the Guarantor is received by the Creditor.

If the consideration of the guarantee is entire, the Guarantor’s estate will be liable for the total amount guaranteed.

In the case of Amigo, the guarantee will be Entire, so the estate will become liable, that is of course if the estate can muster sufficiant assets to cover the loan, if it can`t, then Amigo are out of luck.

This kind of thing is always best dealt with in writing as call handlers seldom know the full details of every senario.

Cmsmith

sourcrates said:

Guarantees can be either divisible or entire -

Divisible guarantee:

This is a type of guarantee which the Guarantor continuously guarantees further obligations over the life of the guarantee.

Entire guarantee:

This is a type of guarantee where the Guarantor guarantees payment of one supply or loan only.

Can a death revoke a guarantee? The simple answer is “Yes”. If the consideration of the guarantee is divisible, the guarantee can be revoked once notice of the death of theGuarantor is received by the Creditor.

If the consideration of the guarantee is entire, the Guarantor’s estate will be liable for the total amount guaranteed.

In the case of Amigo, the guarantee will be Entire, so the estate will become liable, that is of course if the estate can muster sufficiant assets to cover the loan, if it can`t, then Amigo are out of luck.

Why is this not stated in the contract, terms and conditions or agreement? Wouldn't it be classed if that's the case as mis-selling a loan to the guarantor? 

jonesMUFCforever

It probably is - but not in your terms but the one that the guarantor signed.

Cmsmith

jonesMUFCforever said:

It probably is - but not in your terms but the one that the guarantor signed.

I have them also, and trust me its not. I've requested a copy were its highlighted in the terms. I guess I'll have to wait and see what they come back with. With already been mislead on the phone, and being told the loan was now my sole responsibility. It also states that in the letter! Then in the next sentence it says it could claim on the estate. Sole responsibility, is sole responsibility. I wouldn't be surprised if they don't provide me with anything. There's nothing online either that states what happens upon a guarantor's death. 

Grumpy_chap

Is the OP likely to be a beneficiary of the Guarantor's Estate?  I assume the OP is close to the Guarantor.
If so, the best thing would be for the OP to use the money received from the Estate to pay off the Amigo loan.  That way, the OP cannot default, cannot get CCJ, and there can be no further claim on the Estate.  It will be quite untidy if the Executor cannot wrap-up the Estate with reasonable swiftness and is prevented from distributing the value of the Estate - other beneficiaries may well need or wish to have the funds sooner rather than later.

sourcrates

Does the estate have any assets at all ?

As long as you keep up your repayments, then this may never be tested, its now the estate that has taken on the roll of guarentor, so only if you default will the estate be approached for payment.

Who is the executor of the late guarantors will/estate ?

fwor

Cmsmith said:

There's nothing online either that states what happens upon a guarantor's death. 

The way that assets and debts are handled when someone dies is well established and documented in law. There is no need for Amigo to restate in their T&Cs all of the legal conditions that are part of established law. This is simply a liability that the deceased person's Executor needs to deal with (unfortunately). You won't be able to make a mis-selling case based on this.