# Guarantor on credit union loan



## Jp2017 (20 Sep 2017)

Hi Guys. 

I'm hoping someone here might have some information that might help me. I was adjudicated bankrupt a number of months ago. One of my loans was with the credit union and for this loan I got one of my parents to go as guarantor. This was 10 years ago before the crash took place. Since I obviously got into difficulties and I'm nearly 5 months into my bankruptcy. The said institution is now however perusing my parent who is at this stage an old age pensioner in there seventies and who has impaired loans of there own after the carnage of the past 8 or more years. My question is what's the best way to get this sorted?  Have the credit union really a right to Persue my parent at this stage?  They are pretty aggressive but this has for me been a real feature of the credit union all through my troubles. I found banks much more easy to deal with. Any advice would be much appreciated.


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## cremeegg (20 Sep 2017)

Jp2017 said:


> Have the credit union really a right to Persue my parent at this stage?



Is there some reason to think that the credit union can not pursue the guarantee?


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## Jp2017 (20 Sep 2017)

I don't honestly know. I just wondered after me being declared bankrupt would they still be entitled to Persue them!


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## Palerider (20 Sep 2017)

The guarantor is responsible until the guarantee is cancelled.

That said was the CU debt not Included in the bankruptcy.


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## Evie1962 (20 Sep 2017)

That's the reason for a guarantee, in case you are not in a position to repay the loan. It's not something to be taken lightly. I was burned that way myself many years ago, not for a whole lot thank goodness, but it taught me a lesson. 
The credit union have every right to pursue your parent, the bank would do the same. The only thing you can hope for is that your parent can repay the loan, and then you repay them when you can.


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## Gordon Gekko (20 Sep 2017)

They have every right to pursue your parents. That's the purpose of the guarantee unfortunately.


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## Jp2017 (20 Sep 2017)

Yes the debt was included in the bankruptcy that's why I thought as the debt would have been written off that they could not be held responsible for a debt that no longer exists.


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## Jp2017 (20 Sep 2017)

They unfortunately are not in a position to pay this as I outlined in the first post they have distressed loans themselves since losing all there savings in the crash. I understand that if I just didn't or couldn't pay back the loan myself and wasn't in bankruptcy that they would certainly be held responsible as guarantor as the loan would still exist and be on the books of the credit union as outstanding. I suppose what I'm really asking or trying to question here is by virtue of the fact that I was declared bankrupt on a date 5 months ago the credit union debt would have been wiped clear on that day and no longer exists so how can a guarantor be held responsible for a debt that is no longer in existence?  That's what I'm questioning.


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## Evie1962 (20 Sep 2017)

I'm no legal expert, but I wonder does the guarantee trump the bankruptcy?


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## Gordon Gekko (20 Sep 2017)

That's not how debts work. You no longer owe it on foot of the bankruptcy. So the credit union go after the guarantor.


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## Palerider (20 Sep 2017)

Is this not a question for an expert.

My ten cents as a former Banker....the primary debtor is bankrupted, all his debt is cleared.

The guarantor is not liable until they are called upon formally by the CU. If the CU called upon the guarantor as soon as they were advised of the impending backrupcy then they may have an argument I would support.

If they called post bankruptcy then his liability was included in the bankripcy and so discharged.

Court may have to decide on this one.


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## Jp2017 (20 Sep 2017)

Palerider said:


> Is this not a question for an expert.
> 
> My ten cents as a former Banker....the primary debtor is bankrupted, all his debt is cleared.
> 
> ...


Thanks for your contribution. I would be thinking along the same lines. Some legal advice is where I will have to go with this I think.


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