# Spouse gave personal guarantee without my knowledge.  What are the implications?



## Alwyn (19 May 2011)

Hi, this is a long winded scenario so I wont bore you all with the details.  Without my knowledge my wife took out a significantly large loan which she now cannot afford to repay.  She also gave a personal guarantee.  All our assets are jointly owned.  What are the implications for me in this debacle?


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## Brendan Burgess (19 May 2011)

Hi 

I am not sure what you mean about the "personal guarantee"? 

When someone borrows money, someone else usually guarantees it, not the person taking out a loan. For example, a company's loan would usually be guaranteed by the directors. A child's mortgage, might be guaranteed by their parents. 

I am not a lawyer, but as I understand it, your wife is liable for the loan. They can ask her to sell her assets, including her 50% share in the family home, to pay off the loan. It would be legally difficult to do this, especially if there is a mortgage in place.

A better outcome for all would be where you negotiate a solution. Although you are not liable for your wife's debts, you could offer a small amount to settle the debt.

Brendan


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## Alwyn (19 May 2011)

Hi Brendan, thank you for your response.  As you can gather relations with my wife are not too good at the moment.  She has left the family home and refuses to answer any of my concerns.  

I did not know somebody guarantees a loan for you  That really puts a different perspective on things.


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## Brendan Burgess (19 May 2011)

Boomtobust

My post is poorly worded. 


> When someone borrows money, someone else usually guarantees it, not the person taking out a loan.



What I should have said is: 

The person taking out a loan does not guarantee their own loan. 

_If _there is a guarantee, then someone else would be the guarantor. 

Most loans are not guaranteed. Who is the lender? What was the money borrowed for?


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## Alwyn (19 May 2011)

She had a Limited company that was hit badly by the downturn.  She borrowed 80K to keep the business afloat and did not tell anyone she was doing so.  The loan is with Ulster Bank.


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## Brendan Burgess (19 May 2011)

OK

So the company borrowed the money.

She guaranteed the company's borrowings. 

They will pursue her to get repaid. They can't pursue you, but if they get a judgment, they could register it against her interest in the property. (Although there was a recent court case on this which changed the interpretation of the law)

Brendan


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## tvman (20 May 2011)

I'm not a solicitor but you need to get legal advice around the application of the Family Home protection Act (1976) to your situation - essentially this act preceludes creditors from getting judgement over a family home where one of a married couple pledged it as a security for a loan/guarantee without the written consent of the other partner.


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## mf1 (20 May 2011)

tvman said:


> I'm not a solicitor but you need to get legal advice around the application of the Family Home protection Act (1976) to your situation - essentially this act preceludes creditors from getting judgement over a family home where one of a married couple pledged it as a security for a loan/guarantee without the written consent of the other partner.




Wrong, wrong, wrong. 

A spouse cannot mortgage/charge a family home without the consent of a non owning spouse. But a creditor can get a judgment against a debtor and place a judgment mortgage on, and force the sale of, a family home.

mf


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## tvman (20 May 2011)

I stand corrected (assuming you're right)


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## Thirsty (20 May 2011)

> A spouse cannot mortgage/charge a family home without the consent of a non owning spouse


You'd be surprised....fake signatures are not at all uncommon.


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## Alwyn (30 May 2011)

Thanks Mf1 that clears that up.


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