Advice on being guarantor when on DMP

gorskiii

I posted this in debt-free wannabe and they said it’s best here, so reposting for advice:

I started my DMP last Autumn after reading numerous threads on here (which proved extremely helpful). It’s all going well and on the road to being debt free in a few years.

However, there could be a potential spanner in the works and hence my new post. I’m a guarantor for my niece on her rented property. The contract expires mid-July and she is 1.4K in arrears of her rent due to losing her job. 

The rental company contacted me the other week re this and said the landlord is wanting the owed money and asked them to contact the guarantor.

I didn’t think at the time but when I started my DMP should I have advised the rental company? I don’t think I’d be able to pay what is owed and I’ve told her to speak to them to arrange a repayment plan. Which she said she’ll do but hasn’t to date.

i know I’ll be liable for the money but how can I pay it when I don’t have it? Do I need to talk to them myself? Just not sure where to start with it all…

LinLui

You need to redact the personal information. For starters I now know who you are!

gorskiii

This is the email as well as demand letter and guarantor contract which was all attached.

gorskiii

LinLui said:

You need to redact the personal information. For starters I now know who you are!

Cheers. Thought I’d removed everything I should’ve done. Removed post and now attempt No2.

propertyrental

As you are aware, you are equally liable as your niece for the debt. The LL can (and eventually probably will) take legal action against you both jointly. Of course, whatever the outcome of that legal action, if neither you nor she have the money, you won't be able to pay (unless you borrow elsewhere eg family).

That might lead to an attachment of earnings (if you are working) or a charge on your property (if you own one) or indeed bailiffs removing goods to the (2nd hand) value of the debt (and costs).

I know little about DMPs so cannot comment on potential impacts there.

fatbelly

Of course if there was a court claim and you responded as you are supposed to do, setting out your other debts, what you can afford, and what a pro-rata payment to this debt would be ... Then the court should make an instalment order on th at basis.

It's only if a court order is defaulted on that a creditor can move to enforcement action, be that aoe, charging order, 3pdo or bailiffs

That's some way off yet. Encourage your niece to pay her rent, claiming UC if appropriate

gorskiii

fatbelly said:

Of course if there was a court claim and you responded as you are supposed to do, setting out your other debts, what you can afford, and what a pro-rata payment to this debt would be ... Then the court should make an instalment order on th at basis.

It's only if a court order is defaulted on that a creditor can move to enforcement action, be that aoe, charging order, 3pdo or bailiffs

That's some way off yet. Encourage your niece to pay her rent, claiming UC if appropriate

So would I be liable for the full amount or just part of it? Seems about right that you’d fill in a form with your income, outgoings etc (did that for my DMP and that formed the repayment plans) and payment would then be made from that. I’ve told her to contact them and arrange a payment plan a know most will agree to that.

eddddy

gorskiii said:

So would I be liable for the full amount or just part of it? 

You're potentially liable for all of it.

In simple terms, the landlord has a choice of who they chase for the money.

They might choose to chase you for the full amount, or chase the tenant for the full amount, or chase both of you.

Typically, a landlord would chase whoever they think is more likely to pay up.

theartfullodger

Don't.  Too big a risk 4 you 

LinLui

theartfullodger said:

Don't.  Too big a risk 4 you 

Too late.  They already did! 

Grumpy_chap

eddddy said:

gorskiii said:

So would I be liable for the full amount or just part of it? 

You're potentially liable for all of it.

Potentially all of the current arrears plus whatever future arrears the Niece may accrue.
Is the Niece now paying the rent?

There are often comments when queries about the liabilities of the Guarantor are asked that people advise various reasons why the Guarantor Agreement may not be enforceable.  Hopefully one of those knowledgeable people will comment shortly if there are any escape routes for the OP.

Of course, that won't help the OP's Niece.