Guarantor Loans

Exodi

Deleted_User said:

You need to check a lot of things very carefully, retrospectively taking her name off the house deeds isn't a magic wand to prevent the lender coming after her in that way given that was the situation when the loan was made.

The OP acknowledges this very clearly. It is being taken as a proactive measure.

ratechaser

Hectors_House said:

macman said:

Has she agreed to gift you her share of the property and to transfer it into your sole name? You cannot just 'take her name off the deeds' without her agreement. This will effectively make her no more than an authorised guest in her own home, without any rights to occupy except with your permission.
If her mental health is such that a court would rule that she was unable to consent to being a guarantor, then it's unlikely that she would be able to consent to signing over her share of her own property either. I suggest that you take professional legal advice on this.
How is the property owned: joint tenants or tenants in common?

Thanks macman. I believe the home is owned as Joint Tenants. This was done so that it would automatically revert to the other should there be a death without the need of a Will. We are both happy with this as we both intend the other to inherit the house in the event one of us dies.

She has agreed to her name being taken off the deeds as she can trust me not to turf her out. I am beginning to think we might have to go down the Power of Attorney route.

I’ve sought legal advise this morning and am speaking to my solicitor next week. In the meantime I’m working with her on the Letter of Complaint to go to the lenders to try to get her out of this mess.

Her mental issues are more a weakness in saying no to people leading to her being easy to manipulate and not considering the implications of her decisions added to being on many medications for depression, anxiety and epilepsy.

One of the borrowers told her the house wouldn’t be at risk if she agreed to it too.

I'm not the property law expert here but this just sounds plain wrong... whatever the rights or wrongs of her standing guarantor for loans, you are talking about disenfranchising her of her joint ownership of a property, and replacing it with a 'trust me, I'll look after you' statement.

At best this sounds horribly misguided, at worst it sounds downright coercive given you say yourself that she is easily manipulated. 

On the assumption that you are trying to do the best thing, this needs professional advice before you go any further - there's a big difference between having a PoA in place due to mental capacity, versus giving up your beneficial interest in a property.

jonesMUFCforever

I agree if you are taking legal advice on this then your solicitor will make the sister go to a solicitor for her own advice - and I do not believe that either side would agree to do such a thing as you are considering.
I think the only way you could do this would be to purchase her half and make her your lodger/tenant.
1. You could in theory throw her out . 2. It could be seen  as depravation of assets should she need social care in future, 3.give you free access to sell if you chose and move elsewhere and keep 100% of the monies.

I can hear you screaming at me now that you would never do such a thing - but you never know??

Hectors_House

jonesMUFCforever said:

I agree if you are taking legal advice on this then your solicitor will make the sister go to a solicitor for her own advice - and I do not believe that either side would agree to do such a thing as you are considering.
I think the only way you could do this would be to purchase her half and make her your lodger/tenant.
1. You could in theory throw her out . 2. It could be seen  as depravation of assets should she need social care in future, 3.give you free access to sell if you chose and move elsewhere and keep 100% of the monies.

I can hear you screaming at me now that you would never do such a thing - but you never know??

That’s OK jonesMUFCforever and ratechaser I’m here looking for advise. As she has shown no regard for the risks she was taking as well as leaving my possessions at the house at risk of being taken by bailiffs (I don’t live there now) I’m at a loss what I can do to stop her doing this again. 

I tried to get her to see what could happen when I found out about the first loan and then she goes and agrees to standing guarantor for a loan for the ladies daughter. 

It was only by chance that I found out about both of them because she ignored her mail.

I don’t know what to do. She is on such a cocktail of meds nothing registers. She’s not bothered about the letter demanding £10,000 in thirty days. She hasn’t even read it.

Aranyani

If you become her power of attorney then you will have a legal duty to act in her best interests.  

You couldn't take away her ownership of the house as that would clearly not be in her best interests, but you would be able to have full sight of her finances and stop her making these bad decisions.  

Hectors_House

Aranyani said:

If you become her power of attorney then you will have a legal duty to act in her best interests.  

You couldn't take away her ownership of the house as that would clearly not be in her best interests, but you would be able to have full sight of her finances and stop her making these bad decisions.  

Thank you Aranyani. I’ve been drafting the Letters of Complaint to go to the lenders so that’s something that can be done.

My father has suggested that a Power of Attorney might be needed and I’m guessing her credit rating will already have been adversely affected by the borrower who has defaulted on her loan.

Thank you everyone for your comments. Please keep them coming. 

Dr_Crypto

If she’s incapable to the extent that a POA is being considered then she is clearly not in a position to be taking on credit so her credit history seems immaterial. 

I can’t see how you can remove her interests in the property. If she lacks capacity and you are appointed an attorney then you must act in her best interests, which would not involve giving away her share of her home to you. To do so really sounds potential abusive even though you clearly don’t mean her any harm. 

Hectors_House

Dr_Crypto said:

If she’s incapable to the extent that a POA is being considered then she is clearly not in a position to be taking on credit so her credit history seems immaterial. 

I can’t see how you can remove her interests in the property. If she lacks capacity and you are appointed an attorney then you must act in her best interests, which would not involve giving away her share of her home to you. To do so really sounds potential abusive even though you clearly don’t mean her any harm. 

Thanks for your input Dr_Crypto.
Its a minefield and I certainly don’t mean my sister any harm but, at the same time she has twice now put our house at risk by standing guarantor for two large loans she has no means of paying.

I have read that, should a loan revert to her and she does nothing about it (she ignores her mail despite me pleading with her not to) and it goes to court we could end up with a charge on the house and that the court could put a further order in place that would force me to agree to a sale to clear the debt.

To me it is fast looking like the time to be concerned about her rights is running out - unless someone here can suggest a way I can stop her from taking these risks with our home because my sitting her down and pleading with her hasn’t worked.

She was told the first one she signed up meant she would have to pay Amigo Loans over £20,000 if it reverted back to her. Money she doesn’t have. Even having made her aware of this she goes behind my back again and stands guarantor for this woman’s daughter to the tune of £5,000 (£10,000 including interest and charges should it revert to her. 

What do I do??!!

Dr_Crypto

I think you’re doing the right thing by seeking advice on a POA. However, if her mind has deteriorated to this extent you may well need a court order to be appointed since she may be incapable of making you her attorney. 

It might be worth asking someone like Age UK for some advice too. Financial abuse is sadly common with the elderly and it sounds as though those using her as a guarantor are heading along those lines (assuming they know of her difficulties). 

Aranyani

If you feel that you don’t want to worry about her rights anymore then you are not the right person to be her attorney.

Maybe the best thing to do is sell the house and cut your financial ties so that her decisions don’t impact you any more?