# Credit union threatening legal action - guarantor issue.



## Skane (21 Apr 2011)

Hi all , new member and first post and it's a doosie! i am very worried over this and don't really know where to look or turn.

Basically my story is as follows some years ago my sister bought an apartment under the joint ownership scheme,she borrowed her half of the mortgage from the local credit union,the needed a guarantor and i duly obliged - times were relatively good.

Since then her circumstances changed she is out of work,and has spent the last 4 years battling with the credit union via MABS to keep her payments up as best as possible,i have been called into the credit union several times even once taking out a loan on their advice to clear the outstanding arrears on her loan to give her a fresh start so to speak but it has been an uphill battle for her,i am currently paying off my own loan with them and also paying a small sum of money a week on top of her small sum to try and keep them at bay! she is now an out of work single mother and Last week her apartment was repossessed by the council she is now in rented accommodation getting rent supplement.Yesterday she received a letter from the credit union demanding a substantial amount of money be paid off the loan by next Tuesday or legal action would be taken.This is where i come into play i am really worried about this and how far the credit union will pursue me to get the loan paid off,i am a 35 yr single male on a modest income (i work as a security officer) i live at home with my widowed elderly mother.

My question is if this goes to court what can i expect ? can i expect some sympathy from the judge or are the credit union simply playing the bully boy hoping we fall for their bluff? i am desperately worried i never ever saw myself ending up in cvourt for anything and dont know who to turn to.

Worried.


PS i have searched a few posts on this site and realise my situation is trivial and minor compared to others but i am none the less worried!


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## niceoneted (21 Apr 2011)

What is the amount outstanding? What is the term remaining? 
Was the apartment repossessed because of the lack of payments to the CU or was your sister to pay something to the council also?


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## Brendan Burgess (21 Apr 2011)

Hi Skane

I appreciate that you are worried, but it's important to be blunt here.

 Using terms like "battling with",  "bully boy" and "bluff" don't advance your cause at all. 

The CU was  not prepared to give your sister a loan on her own, so they presumably were concerned about her ability to repay the loan. You said to them "Don't worry, if she can't pay it, I will take responsibility for it". 

Now, she can't pay it, so you must take responsibility for it. 

The Credit Unions take debt collection very seriously indeed. The money they lent to your sister belongs to other members. They want it back. 

You need to talk to the Credit Union. You need to accept responsibilty for your guarantee. You need to work something out. Legal action is not in your interest or their interest. Go with your sister to MABS as they have a lot of experience of dealing with the CUs in their area and will know what their practice is.


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## idkwatmi (21 Apr 2011)

I think this is a situation that is going to arise more and more. its so important that when people act as guarantor on a loan that they realise the implications involved if the loan gets into difficulty. i have acted as guarantor before on a modest loan but i had to meet with the CU representative and was told exactly what would happen if  loan was not repaid. 
OP did this happen in your case?[FONT=&quot]
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## Brendan Burgess (22 Jun 2011)

castaway said:


> The bullying tactics by credit union



There is no indication of bullying here at all. The OP gave a guarantee and the CU wants their loan repaid. 



> is out of tune with bank code of practice which i believe was enforced  earlier this year.Lenders must engage with individuals on a one to one  basis ,.



Interesting point. The Consumer Protection Code does not apply to Credit Unions, but I think that the Mortgage Arrears Code does. As the loan was advanced to buy a home, the Code applies. The OP should bring the Code to the attention of the Credit Union. 

However as this has been going on for over 4 years, it seems that the one year moratorium is well and truly past. 



> You may complain to regulator if you feel  you are not being treated in an appropriate manner.



If you have a problem, you complain to the Ombudsman, not to the Regulator.


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## Harry31 (22 Jun 2011)

While I do sympathise with the poster & person who took out the loan, I can't understand why it seems acceptable that money borrowed shouldn't be paid back.  If the CU have engaged with the person over 4 years it can't really be called "bully tactics". I would also agree with Brendan Burgess that the money actually belongs to other members.  A friend of mine works in a CU & is shocked that some debtors say they cannot afford any repayment - but are going off on holiday!!  (I'm not saying that this is the case here, just using it as an example). If I owed money I wouldn't even dream of doing anything before I at least made an effort, no matter how small, to repay what I owe.  There is the matter of personal responsibility for all of us.


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