Claim for car loan guarantor termination?

Onju1985

Hi all, I'm new here so hopefully posting in the right forum

11 years ago my partner stood as guarantor for a car loan for a close relative of his. He was a young man at the time and didn't understand what being a guarantor entailed, he even explicitly asked the salesman "so I won't be liable if my relative misses the payments?" and the salesman said no(!!) He thought he would just be a point of contact to chase any issues and his relative helped perpetuate that misguided belief whilst pressuring him to sign up. Anyway relative didn't make a single payment for 3 months, they rang my partner to tell him, he spoke to relative who said they'd pay. A bailiff informed him (after turning up at his place of work!) no payments had still been received and they took back the car from relative and said £5,400 was owed. My partner has been making payments ever since for the last 9 years, paying £45 a month for the first year before managing to get them down to £21 a month for the last 8 years though they are now trying to raise this. The debt was sold on to another company several years ago who he pays now, they are often sending him letters saying he still owes around £3500 and to make him offers to pay them around £2500-£2800 to clear the debt but he has refused thus far. Relative passed away a few years back but never contributed or took any responsibility before then.

To me the whole situation has always seemed wrong but since reading the recent developments with guarantor loans I can't help but wonder if he could have a case to get this terminated? Would this type of loan fall under that or is that just for those loan shark companies like Amigo who charge 50% APR? If this loan would not fall under that could he potentially have a case anyway somewhere given that it was missold to him, relative pressured him into it, the bailiff turning up at his work before they had asked him for the money etc?
Sorry, I am absolutely clueless with things like this! 

[Deleted User]

He can make a complaint if he wishes, but be prepared for nothing to change. Despite what he may now choose to remember, the forms he signed would have told him of his liabilities.

He'd do better to focus his attention on the relative, though nine years is perhaps leaving things a little late.

Sandtree

11 years is a long time to remember a conversation over; even as a young man if I'd asked the question of if  I am "liable" and been told "no" then I certainly would have been asking what a "guarantor" is then. 

Ultimately you have the right to make the complaint and escalate it if necessary however the length of time will be considered when assessing the complaint (though as PPI has shown, it doesnt make it an automatic no)

macman

Deleted_User said:

He can make a complaint if he wishes, but be prepared for nothing to change. Despite what he may now choose to remember, the forms he signed would have told him of his liabilities.

He'd do better to focus his attention on the relative, though nine years is perhaps leaving things a little late.

He is an ex-relative. he is dead, he has ceased to be...

Trying to prove 'mis-selling' when you are a guarantor on a loan made 11 years ago is going to be a complete waste of time. Best route forward maybe to offer a compromise amount (maybe £1k-1.5K?) and say you will simply default unless they are prepared to cut a deal. Call their bluff.

The fact that they've voluntarily sought to end this shows that there's no desire on their part to carry on collecting a mere £234pa.

What is the APR on this loan?

And were there no funds in the estate of the deceased that could have paid this off several years ago? Or was it insolvent?

nyermen

Suspect OP hasn't got any paperwork - that would be my first target.  Was the guarantor paperwork done correctly for example.  Can they even produce the paperwork?
Suspect the debt is there still accruing interest as well, albeit over 9 years or so, with I think a gap of £900 between payments and change in outstanding principal?  Creditor is indeed probably thinking is it worth it to drag on another 9 years for another £900 (which is what in real terms in 9 years?  £600?)

Onju1985

Thanks for the replies
We just figured it was worth asking the question. I know it wasn't the best move on his part to go into it without knowing the consequences but between what relative and salesman were telling him he thought he would just be someone to contact and nudge relative to pay, as naive as that is! I know he can't prove pressure or what the salesman told him. He doesn't have any of the initial paperwork either as he lived with relative at the time (though moved out shortly afterwards) and he never saw the paperwork again, the first correspondence he has is the confirmation the car was being reclaimed. 

No funds from the estate unfortunately, their financial status did not improve in the last years of their life. Unsure of the APR too though I don't think it's anything mega. I will suggest he makes the low offer/bluff if he doesn't end up wanting to try the complaint route (or if he tries that and it fails like it sounds likely from what you have all said) would he complain direct to the company if he did wish to attempt a complaint? 

nyermen

Not sure if the process is different, but could also be worth a prove-it letter to see if they still have the documentation?  Template can be found here: https://forums.moneysavingexpert.com/discussion/6027800/updated-debt-free-wannabe-sticky-links-to-important-topics-help-and-template-letters-are-here#latest

sourcrates

Provit letter not appropriate in these circumstances.

If it was a consumer credit act loan, for a fixed sum credit agreement, then ask for the paperwork under sec 77/79 CCA.

If they cannot provide it, they cannot enforce the debt in court, so you could just walk away, or make a small offer to settle.
It appears he has been a tad naïve here, hopefully he has learnt a lesson.

Template letter here -

Sample Letter - National Debtline | Sample letters - Information about your agreement under the Consumer Credit Act | National Debtline

Onju1985

He has been very naive and has definitely learned his lesson and been a lot more careful in the years since when it comes to even lending money to anyone, nevermind legal processes! 
Thanks for your help though, that's great I will get him to try asking for the paperwork and send him the links, fingers crossed! 

[Deleted User]

The best solution would be pay them the £2500