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Guarantor, any way out?

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Found 24th Jun 2013
Please any advice, I agreed to be a guarantor for my best friend of over 20 years for a loan, to cut a long story short she failed to pay twice this year and i have had to pay two missed payments of £108, i really tried to be nice about it but she turned really nasty and is completely ignoring my texts phone calls and letters, i can't afford this and am constantly panicing every month i will have to pay if she doesn't, i have written to the loan company saying i am no longer in a financial position to be her guarantor but they say basically tough ****, there must be something i can do the loan is for another 4 years, I'm screwed!!!!
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WOW oO
Yes you are screwed and a hard lesson learned I hope.

You can't get out until the loan is repaid in full or if the person with the loan gets a new guarantor.

You could try to take legal action but doubt anyone would care
Very hard lesson, i never ever thought she would do this to me, Thanks anyway
I would go and see the citizens advice bureau and see if they can help. 20 years seems a long time to be a Guarantor.
Best of luck and hopefully you can get out.
Good luck!
Jason89

I would go and see the citizens advice bureau and see if they can help. … I would go and see the citizens advice bureau and see if they can help. 20 years seems a long time to be a Guarantor. Best of luck and hopefully you can get out.



best friend of over 20 years

Jason89

I would go and see the citizens advice bureau and see if they can help. … I would go and see the citizens advice bureau and see if they can help. 20 years seems a long time to be a Guarantor. Best of luck and hopefully you can get out.



The friendship is over 20 years, not the loan.
Jason89

I would go and see the citizens advice bureau and see if they can help. … I would go and see the citizens advice bureau and see if they can help. 20 years seems a long time to be a Guarantor. Best of luck and hopefully you can get out.



I will try that Thanks
Oh yea obv cant read.. Still I would book an appointment with CAB and see if they can anything for you.
fingers crossed!
There is no get out clause as a guarantor. I would get your Solicitor to write to her saying that if she did not find an alternative guarantor and release you from the debt, you will have no option but to inform all the credit agencies of her default, and perhaps all her friends/family you are able to contact too. She has no concern for you. Reciprocate the action! Good luck...
That REALLY sucks. I'm sorry to hear of your troubles. Unfortunately, the quickest way to spoil a friendship is to introduce 'money' into the equation. It sounds harsh but the motto "Never a borrower or a lender be" is quite appropriate here. I think friends/family are even worse to lend to as they think the 'connection' means that you'll be more understanding/forgetful if a shortfall occurs!

You don't say how 'close' a friend you are - i.e. has this little episode driven you apart? What I mean to say is, can you not physically visit your (so-called) friend and politely explain that this situation has really put YOUR financial security at risk. Maybe they have someone else (a family member perhaps?) they can approach to transfer the guarantorship over to? I know this may be why they asked you in the first place - as they have no-one else to turn to but I thought I'd ask just the same.

If there is no redress between the both of you, then others above have suggested a very sound strategy of visiting your local CAB. They may be able to help you understand your options. I don't know what sort of sum of money we are talking about here but if repayments are over £100 p/m then it must be quite sizeable. Do you know (via the loan company) what your total responsibility is? You say that they say "tough" but what does that actually mean? I.e. are you responsible for the full balance? I've never been in this situation myself so I don't fully understand the guarantors 'liability' limit. I'm just wondering whether you could take court action against your 'friend' for the underpayment(s) or perhaps that wouldn't stick as you have willingly entered into a contract as their guarantor? I don't know. I hope it wouldn't get to that stage anyway.

I can only offer my sympathy and hope you can get this resolved amicably. I hate when money ruins a relationship. I would like to think that if you approached your friend and asked her if the trust and faith you placed in her at the time of your agreement is worth falling out over, she would agree to sort it but; sadly; money does strange things to people's moral fibre. Especially if she's desperate too. You really need to know the facts from her side of the fence. She could be shunning your contact(s) as she is mortified at what's happening and can't face you or the embarassment it carries? Maybe take the moral 'lowground' and ask if she's having problems and it's something you might be able to work on, together?

Just don't offer any further financial aid - no matter how much it might look required. Once bitten - twice shy. Another appropriate saying, I feel...

Best of luck OP. I hope someone else on here, perhaps with a legal background, might be able to offer some solid advice regarding a guarantor's full responsibilities in an instance such as this. I know I said "No more financial aid" but have you considered; as a last option; repaying the outstanding debt/loan - possibly reducing any interest - and then getting a proper legal agreement drawn up between you and your friend to pay you back over a period of time at more manageable/affordable amount each month? Obviously, get the agreement in place before ever considering paying the loan company off! Just a thought for your consideration...

All the best, Phsy.
Do you know what the loan was for it a car was it finance. What happens if you can't pay the money what will the loan company do then. I would simply cancel the direct debit they have with you
9988yevrah

There is no get out clause as a guarantor. I would get your Solicitor to … There is no get out clause as a guarantor. I would get your Solicitor to write to her saying that if she did not find an alternative guarantor and release you from the debt, you will have no option but to inform all the credit agencies of her default, and perhaps all her friends/family you are able to contact too. She has no concern for you. Reciprocate the action! Good luck...



I don't have a solicitor i was hoping it wouldn't need to go that far, when we were talking (well texting because she wouldn't actually talk to me) I suggested she borrow the money from family to pay me back she said they were all going through bad times her grandad had cancer, her sister just had a baby etc etc I have been nothing but nice and tactful to try and sort this out and i don't know if i have it in me to be as nasty as she has been to me (she actually called me vile) but i think i might have to be!!! Thanks
thegazman

WOW oO



This
Phsycronix

That REALLY sucks. I'm sorry to hear of your troubles. Unfortunately, … That REALLY sucks. I'm sorry to hear of your troubles. Unfortunately, the quickest way to spoil a friendship is to introduce 'money' into the equation. It sounds harsh but the motto "Never a borrower or a lender be" is quite appropriate here. I think friends/family are even worse to lend to as they think the 'connection' means that you'll be more understanding/forgetful if a shortfall occurs!You don't say how 'close' a friend you are - i.e. has this little episode driven you apart? What I mean to say is, can you not physically visit your (so-called) friend and politely explain that this situation has really put YOUR financial security at risk. Maybe they have someone else (a family member perhaps?) they can approach to transfer the guarantorship over to? I know this may be why they asked you in the first place - as they have no-one else to turn to but I thought I'd ask just the same.If there is no redress between the both of you, then others above have suggested a very sound strategy of visiting your local CAB. They may be able to help you understand your options. I don't know what sort of sum of money we are talking about here but if repayments are over £100 p/m then it must be quite sizeable. Do you know (via the loan company) what your total responsibility is? You say that they say "tough" but what does that actually mean? I.e. are you responsible for the full balance? I've never been in this situation myself so I don't fully understand the guarantors 'liability' limit. I'm just wondering whether you could take court action against your 'friend' for the underpayment(s) or perhaps that wouldn't stick as you have willingly entered into a contract as their guarantor? I don't know. I hope it wouldn't get to that stage anyway.I can only offer my sympathy and hope you can get this resolved amicably. I hate when money ruins a relationship. I would like to think that if you approached your friend and asked her if the trust and faith you placed in her at the time of your agreement is worth falling out over, she would agree to sort it but; sadly; money does strange things to people's moral fibre. Especially if she's desperate too. You really need to know the facts from her side of the fence. She could be shunning your contact(s) as she is mortified at what's happening and can't face you or the embarassment it carries? Maybe take the moral 'lowground' and ask if she's having problems and it's something you might be able to work on, together?Just don't offer any further financial aid - no matter how much it might look required. Once bitten - twice shy. Another appropriate saying, I feel...Best of luck OP. I hope someone else on here, perhaps with a legal background, might be able to offer some solid advice regarding a guarantor's full responsibilities in an instance such as this. I know I said "No more financial aid" but have you considered; as a last option; repaying the outstanding debt/loan - possibly reducing any interest - and then getting a proper legal agreement drawn up between you and your friend to pay you back over a period of time at more manageable/affordable amount each month? Obviously, get the agreement in place before ever considering paying the loan company off! Just a thought for your consideration...All the best, Phsy.



We have been the best of friends for 23 years almost like sisters i never thought this would happen, i agreed to be the guarantor as she was desperate she had got her self into debt using the payday loan companys and took out a £5000 loan with amigo loans to pay it all off, she assured me she could afford the monthly payments and didn't want her family to know of her mess so i agreed.
The first time she missed a payment shetexted me and said sorry and she would pay me back when she got paid (which was 2 weeks away) she didn't and i had to contact her she made lots of excuses and promised to pay me, this went on for a couple of months then she missed another payment, i phoned her but she wouldn't speak to me so i texted her being very nice and made suggestions to help her out etc etc but she kept ignoring me i wrote a letter to her and said if she continued to ignore me i would go and see her parents ( i was getting desperate as i can no way afford this money) she then gave me a torrent of abuse by text and said i was vile, i was very hurt and upset so i let it go for a while and wrote to amigo loans and explained everything but they said as a guarantor if the person fails to pay it is your responsibility to pay it for them and they will keep coming after me not her to make the payments as i am in a contract with them also, i have written to her countless times explaining how hard it is for me financially (one of the payments came out of my account the week of my daughters birthday) she accused me of emotional blackmail, it seems no matter how nice i try and be she throws it back at me, i just want to get this sorted out and i dont know if i can get nasty like people have told me even though this has completely ruined our friendship and she has been so hurtful (it would take too long to put everything that has been said) i might have to accept that i will never get my money back from her but i am worried about the future as this was at the start a 5 year loan monthly payments of £108 and it started in february this year, I think i will go and see CAB and then maybe also try what you have suggested and go and see her even though its miles away (we have just moved as my husband was made redundant in march)
Thank you so much for taking the time to try and help, and yes you are right once bitten, this has changed me for the worse i fear! I am so shocked by her reaction its a side of her i didn't know existed and has made me question my own judgment and trust in people its just really horrible.
Seek legal advice NOW!!!!

You could ask a solicitor to write to the company stating that your relationship and any and all connections of any kind are severed, you lost contact with the person, they are not your friend and possibly are also owed monies. Then advise the company to seek legal help and you are willing to be supportive as long as their is compensation for lost time incurred.

SIMPLE but expensive
Paydayloan companies are vultures, they are the real retched people; they should not have made the loan out in the first place clearly -well deliberately. They will unfortunately have a system in place of ignoring any get out clause unless brought in front of a judge
everyone who has ever owed me money, have convieniently lost touch with me. Thankfully never leant them that much and had a strong inkling they would never pay it back. Its unfortunately a harsh lesson, only be prepared to give away money not lend money to so-called-friends!!! If they were your friend they would not ask you in the first place
Thanks everyone for all your advice etc i really appreciate it, yes it is a very hard lesson i have learn't but i am willing to try everything that you have all suggested and i will let you all know how i get on (could be a long wait) Thanks again
This sounds a nightmare, the problem is even if you don't pay, the collectors will come after you, which is awful considering your friend has reaped the benefits of the loan. There isn't even a joint liability for this kind of thing, because basically you have got the loan out in your name, and given the loan to your friend, its a bad situation and I feel for you.

Personally, if it were me I would try the kindest approach possible with your friend, although she has done the dirty, if you make her feel guilty that she has put you into this situation, then she should pay up if she has a heart, if she wants to play hard ball, then just file a claim for the small claims.

If this a car loan, guaranteed on something, then you should be able to claim that item back, would your friend be prepared to lose it?
Well the alarm bells should of started before you got involved considering she needed to take out payday loans in the first place and then said she could make repayments every month. I'm pretty sure if you're already using them you won't have money to pay anyone anyway. Obviously can't budget and has probably spent the £5k on something else
Hiya you might already have all the answers needed. But another place to seek good advice is the Consumer Action Group.

Another option maybe a small claims court. Will only cost £85 and they have the power to impose an earnings arrest warrant on your (ex) friend.

Hoping for a good outcome for you...
TheAppleGeezer

Hiya you might already have all the answers needed. But another place to … Hiya you might already have all the answers needed. But another place to seek good advice is the Consumer Action Group.Another option maybe a small claims court. Will only cost £85 and they have the power to impose an earnings arrest warrant on your (ex) friend.Hoping for a good outcome for you...



The small claims court is an option but you must prove you have gone through every other option and its not always easy given the fact there is a Lego contract that the person will guarantee the loan. The idea of guaranteeing a loan is that you are telling the company that you will cover the loan should the friend not be able to. I reduces the companies risk. I imagine it was the only way e girl was going to get the loan.

That said, I'd go to the citizens advice bureau. No cost and great advice, they would likely let you know whether a small claims court case is worth while, however I think the legal contract of being a guarantor would not be able to be stopped.

It can also be a long process so it could make things worse. The £85 is one thing but there is the potential the poster could end up with the loan repayments every month, until its sorted, which could be many months.

Best of luck. Horrid situation. Try to stay calm. Don't do anything rash. Keep trying to get advice, if you have not already try that Martin Lewis's website. You may find someone who has been through it

£108 per month?

What amount of the £109 is for the actual loan i.e. not including interest? How much of the actual loan is left to pay?
Edited by: "great-deals" 25th Jun 2013
aircanman

This sounds a nightmare, the problem is even if you don't pay, the … This sounds a nightmare, the problem is even if you don't pay, the collectors will come after you, which is awful considering your friend has reaped the benefits of the loan. There isn't even a joint liability for this kind of thing, because basically you have got the loan out in your name, and given the loan to your friend, its a bad situation and I feel for you. Personally, if it were me I would try the kindest approach possible with your friend, although she has done the dirty, if you make her feel guilty that she has put you into this situation, then she should pay up if she has a heart, if she wants to play hard ball, then just file a claim for the small claims. If this a car loan, guaranteed on something, then you should be able to claim that item back, would your friend be prepared to lose it?



Hi Yeh it is a nightmare! But thanks to everyone who has answered i have some pretty sound advice which i am going to try, unfortunately the loan wasn't for a car or anything i could claim back it was to pay off debt! Thanks
great-deals

£108 per month? What amount of the £109 is for the actual loan i.e. not i … £108 per month? What amount of the £109 is for the actual loan i.e. not including interest? How much of the actual loan is left to pay?



Hi The original loan was for £5000 there is still £4500 left to pay.
euphoricmess

The small claims court is an option but you must prove you have gone … The small claims court is an option but you must prove you have gone through every other option and its not always easy given the fact there is a Lego contract that the person will guarantee the loan. The idea of guaranteeing a loan is that you are telling the company that you will cover the loan should the friend not be able to. I reduces the companies risk. I imagine it was the only way e girl was going to get the loan. That said, I'd go to the citizens advice bureau. No cost and great advice, they would likely let you know whether a small claims court case is worth while, however I think the legal contract of being a guarantor would not be able to be stopped. It can also be a long process so it could make things worse. The £85 is one thing but there is the potential the poster could end up with the loan repayments every month, until its sorted, which could be many months. Best of luck. Horrid situation. Try to stay calm. Don't do anything rash. Keep trying to get advice, if you have not already try that Martin Lewis's website. You may find someone who has been through it



Hi Thanks very much for your input, i have had some very good ideas from everyone and i do now have an appointment with CAB so hopefully i will find out legally where i stand, I am trying to stay calm but i must admit this has made me want to do something very rash!!! I will also check out the website you suggested Thanks.
drago773

Well the alarm bells should of started before you got involved … Well the alarm bells should of started before you got involved considering she needed to take out payday loans in the first place and then said she could make repayments every month. I'm pretty sure if you're already using them you won't have money to pay anyone anyway. Obviously can't budget and has probably spent the £5k on something else



Yes in hindsight i should of said no but i just wanted to be a good friend and help but i have certainly learnt my lesson.
TheAppleGeezer

Hiya you might already have all the answers needed. But another place to … Hiya you might already have all the answers needed. But another place to seek good advice is the Consumer Action Group.Another option maybe a small claims court. Will only cost £85 and they have the power to impose an earnings arrest warrant on your (ex) friend.Hoping for a good outcome for you...


Hi yes i have had lots of good advice but always appreciate more, i will try the consumer action group, I must not be the only person in this situation, Thanks.
Just want to say thank you so much to everyone who has taken the time to help me, I have had a lot of very helpful advice and now feel a little more positive, even if the outcome is not a good one at least i will have tried everything i can thanks to all you very nice people, I don't very often post deals on here but over the years have asked quite a few questions and always find the answers here I think this site is ace!!
Did you fully understand what you were taking on? Did you have it explained to you at the time?

Basically you signed a legal agreement to say you would pay if she couldn't, and now she can't pay you seem surprised and upset. That is what you have agreed to do though!

I know it seems harsh and that was why I asked if you understood what you agreed to at the beginning.
nbuuifx

Did you fully understand what you were taking on? Did you have it … Did you fully understand what you were taking on? Did you have it explained to you at the time?Basically you signed a legal agreement to say you would pay if she couldn't, and now she can't pay you seem surprised and upset. That is what you have agreed to do though!I know it seems harsh and that was why I asked if you understood what you agreed to at the beginning.



Hi yes i fully understood what i was agreeing to, at the time she assured me countless times that she could and would make the payments every month, i believed her and not for one second did i question that as we had been very good close friends for 23 years, its easy to judge me but what if a friend like that asked you to do something similiar? I never imagined that this would happen, I have seen a side to her i didn't even know existed in all the time i have known her and now i do feel a real fool for trusting her, i guess the reason i feel upset is that i know she has been away for the weekend to York staying in a hotel and went out for dinner, now if she can do all that and more that i know of then she can pay me back, she knows the hell i have been through in these last few months, my husband lost his job and we lost our house we have had to uproot our 3 kids to a new town and i had to give up my job so we could live with my parents while we get back up on our feet, there are a lot of details like this that i didn't include in my original post but are coming out when people ask me things, i do understand your question though and maybe this will answer it.
kellbell

Hi yes i fully understood what i was agreeing to, at the time she assured … Hi yes i fully understood what i was agreeing to, at the time she assured me countless times that she could and would make the payments every month, i believed her and not for one second did i question that as we had been very good close friends for 23 years, its easy to judge me but what if a friend like that asked you to do something similiar? I never imagined that this would happen, I have seen a side to her i didn't even know existed in all the time i have known her and now i do feel a real fool for trusting her, i guess the reason i feel upset is that i know she has been away for the weekend to York staying in a hotel and went out for dinner, now if she can do all that and more that i know of then she can pay me back, she knows the hell i have been through in these last few months, my husband lost his job and we lost our house we have had to uproot our 3 kids to a new town and i had to give up my job so we could live with my parents while we get back up on our feet, there are a lot of details like this that i didn't include in my original post but are coming out when people ask me things, i do understand your question though and maybe this will answer it.



I was asking mainly as if you hadn't understood what you were getting yourself into then there could have been a way out.

It is nasty of your 'friend' but basically they have decided if they would prefer you as a friend or £5000, unfortunately they chose £5k

In effect through trust they have robbed you.

Please don't think I'm judging though, I had a completely different scenario (business rather than personal) which resulted in a 'friend' owing me more than that. I had to cut my losses - never spoken to them again since but they took advantage of my friendship and my trust in order to screw me over.
I really feel for you OP, not only have you lost your 'friend' but you also have all this to deal with.
Please let us know how you get on with it all.
The fact that you say this agreement only started in February and she has already missed two payments, I would definitely try a small claims court.
I assume that her financial circumstance haven't changed significantly in that time, so I would try and show that she is not paying the loan simply because she would rather keep hold of the that money, rather than the fact that she physically can't afford to pay it.
I haven't had any experience of these types of loan, but what happens if the person who takes the loan simply decides not to pay because the debt isn't on their shoulders?
Mrs.Z

but what happens if the person who takes the loan simply decides not to … but what happens if the person who takes the loan simply decides not to pay because the debt isn't on their shoulders?



Then it is the guarantor's responsibility to pay.

We had my parents as guarantors on our first mortgage as we were slightly short on being able to prove our earnings, but at the end of the day my parents would have been willing to give us the money for as long as we needed it if we did become unable to pay. We never missed a payment a moved a few years later which removed the guarantors.

I guess we could have screwed them over by refusing to pay and spending the mortgage money on something else, but they were willing to take that risk and knew we wouldn't.

I'm guessing the OP weighed up the risks and decided the same, but was wrong about the risk.
Edited by: "nbuuifx" 26th Jun 2013
I think the legal position is that you are stuck with the payments until the loan is repaid. Sorry, not what you wanted to hear. You say your husband lost his job and you lost your home - if you also have your own debts as well as the debt you took on for this person, are you in a position to consider declaring yourself insolvent/arranging an IVA? Not ideal and you must consider very carefully but it can be a reasonable step for some people. If that's not for you, then consider contacting the loan company again - give them precise details of your circumstances/outgoings/income; ask them to consider freezing the interest/extending the payment period. Also, you have lost this person as a friend anyway (no loss in my opinion) so why not consider contacting her family to ask if they would be willing to help. She didn't want them to know about her financial mess but she has lost any right to expect you to keep it quiet. If they are decent people and can afford it they may feel some sort of moral obligation to help you out although they are obviously not liable for this. Finally, if you think she actually has money to pay this and is just choosing not to then do consider taking legal action against her - as others have said the CAB might be a good place to start. Good luck with this, and all credit to you for being a good friend in the first place. I believe in karma - she will get what's coming to her and you will hopefully get some good karma for being such a good friend
if she was using payday loan company's and got in trouble a true friend would of told her family or took her to CAB not through more money at the problem....

first thing is tell her family all of them so they can help her and if any of them are decent they might repay you BUT TELL THEM she might still be doing this with other people as well
You are a "guarantor" so you "guarantee" to pay in the case of her defaulting which is exactly what is happening and no solicitor or CAB advisor will be able to get you out of it. You really should have thought about it before signing up I'm afraid. The best you can do is try and build bridges with your "friend" and resolve it amicably but from what you have said I would pepare yourself for the worst i.e. you will have to continue paying.
Edited by: "tallpete33" 27th Jun 2013
tallpete33

You are a "guarantor" so you "guarantee" to pay in the case of her … You are a "guarantor" so you "guarantee" to pay in the case of her defaulting which is exactly what is happening and no solicitor or CAB advisor will be able to get you out of it. You really ahould have thought about it before signing up I'm afraid. The best you can do is try and build bridges with your "friend" and resolve it amicably but from what you have said I would pepare yourself for the worst i.e. you will have to continue paying.



this. I am not even sure if you could sue your friend unless you had an agreement that she would pay you back if she defaults.
Are you sure the figures you have given are correct? I looked at Amigo Loans web site (I have no knowledge of this company but they say all the right things on their site) and they quote the following;

Representative Example: Borrowing £5000 over 60 months, repaying £197.62 per month, total repayable £11857.20. Interest rate 41.16%. Representative 49.9% APR (variable)

Although the interest rate is variable I can't see it varying THAT much - the £108 a month you quote is an awful lot less than £197! Check the figures....

The other thought which occurs ( a long shot, I know) is to check the initial agreement/paperwork. A relative took out a loan with a well known national company ( the doorstep lender type) who have been around forever. I found out about it and realised that she was paying the kind of interest which I would associate with illegal money lenders! I then realised that the actual paper agreement had not been completed correctly and was therefore not legally valid. After writing to them to point this out and also challenging the validity of their interest rate they stopped contacting her to request repayments and no contact was ever made again. This was almost 10 years ago so I think she is home and clear! As I say, a long shot, but perhaps worth checking carefully?

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