guarantor on bad debt

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designer26

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About 5 years ago my wife(before we were married) went guarantor on a load for a friend. This friend has not re payed any of the load and is apparently not in a financial position to do so. (Though she did not contact banks or us to tell us this) The debt collectors are now coming after my wife to settle the loan. They are threatening to take our car and house contents. My wife's job is not secure at the moment and we are not in a position to take on this loan either as we have a large mortgage ourselves. Can the debt collectors take our things considering they are mine also? Can anyone give me any advice on what we should do?
 
As far as i'm aware they can only take property that belongs to your wife. If say the telly is yours you would need to prove that you paid for it with a credit/debit card in just your name and before you were married. If anything was purchased after you got married i assume it belongs to the both of you and they are allowed to take it. but i stand open to correction.

I know some of these collectors are a pain in the This post will be deleted if not edited to remove bad language but they really dont want to take your belongings. Have you tried to talk to them, maybe lower the payments they are looking for each month. Either way you and your wife will have to repay this loan. For them to take your car it must of been a large amount.

Does this so called friend have no assetts what so ever to even re-pay some of the loan. Can she even be found? What did she do with the money she got from this loan?

It's a terrible situation for you to be in and i relly feel for you. I was in a position that i was asked to go guarantor and i refused and the friendship was lost, when your faced with that question it's hard no matter what you do.

In regards to them taking your car, do you currently have finance on the car? If you do then they cant take it as it doesn't actually belong to you untill you make the final payment, just make sure you have the agreement in a place where if they do come you can show it to them.

Other than that i'd move everything that does belong to your wife out of the house and only have things that you can prove you purchased before you were married. If there is nothing there then they cant take anything.
 
They can and will possibly take anything in your wifes name, as she guarenteed the loan. Have you spoken to the 'friend' about this?

They need to speak to the bank about a payment plan and work this out to call off the debt collectors.
 
as far as i know they cant come after you until they have exhausted all legal means to collect the debt from your "friend".you need to tell them to take your friend to court because until they do she is still liable.im a director of my local CU . but if this is dealt with in the court ie a judgement has been made against your friend then you are off the hook.if anyone turns up at your home dont let them in and call the Gardai, only they have any right of entry .keep a record of all correspondance and phone calls . always ask for the callers name and position in company. if you have any worries or issues go to your local Citizens Advice Bureau usually located in your local Health Centre also MABs are great for even advice
 
Was the loan from one of the major banks? My understanding is that no one is entitled to demand funds until the lending agency has formally called on your wife for payment. Has she received such a formal demand usually by way of registered letter.
 
Thanks a lot for all your comments so far.
We are in contact with the 'friend' in question and she has started to make repayments though not even enough to cover the interest on the loan. Any more comments and advice is welcome.
 
Unfortunately your wife is as liable as the person who took out the loan that's what happens when you sign a guarantee and the bank will pursue the both the person who took out the loan and the guarantor equally.

Don't be worrying about the debt collection company threatening to take your things. Is that exactly what they said because I find that a little hard to believe?. Not saying your lying but first of all they will need a Judgement to do that and it would have to be done through the Sheriff - unlikely to happen to be honest as its normally a waste of time.

I would have a good word in the ear of this "friend" of hers and tell her she better find a way to come to an arrangement with the bank. Once there is money being paid off the account usually the bank will be happy enough.

I feel for your situationa and hope everything works out for you. It's a harsh lesson to learn about signing a guarantee for anyone!.
 
No one is going to strip your house of its contents. A sheriff will not seize goods from a family home. If you own a Ferrari or other such expensive car things may be different.

You should note that debt collectors have no legal powers to seize property. All they can do is ask you to pay. If you don't pay the bank must get a judgement. As said the sheriff will not be interested in your beat up old car or your kettle.
 
bond-007 said:
No one is going to strip your house of its contents. A sheriff will not seize goods from a family home. If you own a Ferrari or other such expensive car things may be different.

You should note that debt collectors have no legal powers to seize property. All they can do is ask you to pay. If you don't pay the bank must get a judgement. As said the sheriff will not be interested in your beat up old car or your kettle.
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Agree with Bond 007. 'Debt Collectors' have absolutely no legal powers to enter your property without your permisson and definitely have no legal right to remove any goods or assets belonging to your wife! The only person who may have this right is the County Sheriff and even then they would be unlikely to remove any assets such as cars or high value machinery unless it was guaranteed that they could recover the full cost of the loan PLUS the cost of seizure, poundage and auction fees incurred (which usually equates to at least twice the value of the judgement to cover the costs).

If the orignal creditors took your wife to court for non-payment on the back of the guarantor loan,firstly they would obtain the judgement, then they may send it to the Sheriff's office for collection (please bear in mind that the Sheriff's office are the only people who can legally call to your property demanding the money at this stage - anyone else who turns up have no legal right to scare or threaten to seize goods!). If the Sheriff's office do turn up, they will assess your current situation and will work with you to ensure that you pay back the debt but in a manner that does not cause unnecessary financial hardship to you i.e. monthly payment plans which the defendant can comply with and the plaintiff is happy to accept.

However, if the level of repayments offered by the defendant are not acceptable to the plaintiff and the Sheriff decides that are no seizable assets to satisfy the debt and subsequent costs which results in the court order being returned from the Sheriff as No Money No Goods (Nulla Bona), then the plaintiff can apply for an installment order. This results in going back to court where a Judge hears all the facts and obtains a statement of means from the defendant detailing income/expenditure and the Judge rules that the defendant MUST make a certain payment each month based on their financial means - failure to adhere to the installment order may result in the plaintiff applying for a Committal Order - therefore a period in prison because the defendant is in contempt of court for failure to adhere to a previous installment order - not for being in debt!! However, it must be stressed that even if a Committal Order is sought and served, the original debt is still owed - serving time in prison does not wipe out the debt!!

I hope this info helps,

Kind regards

LL
 
Can the bank not get a judgement mortgage against the OP's property if it is held in joint names? OP I'd advise you to get professional advice as this is quite a mess. How much is the debt, any possibility at all you could come to some arrangement to repay the debt before it increases and get the 'friend' to repay your wife over time. The debtors might settle for a lower amount if you agree to pay them back in a lump sum as they don't in general want the hassle of pursuing you.
 
bronte what you said does make sense but surely the bank/credit union who ever is owed this loan has already tried to get the money first from the friend and have failed, this is why they are now asking for it to be paid by the op's wife.

I wouldn't hold up much hope that even if this so called friend did agree to make repayments that she would actually stick to the arrangment.

And also op has already said they are not in a position to payback the monthly payments let alone come up with a lump sum.
 
If you go guarantor on a bank loan, then you have signed a contract with the bank to the effect that you will take responsibility for the repayments if the recipient of the loan falls into arrears or cant pay. This is a big responsibility and bear in mind that a bank will only ask for a guarantor if they consider the recipient as high risk of not being able to repay the loan. So by going guarantor in the first place, you are fully aware that your friend is likely not to be able to pay at some point in time.

The bank does not have to exhaust all legal avenues i.e. take friend to court, before they pursue the guarantor. Once the friend is in arrears they are entitled to start calling in the guarantee that the guarantor has given.

From a legal perspective, as the friend is not or cannot pay, then this debt is effectively the OPs and the bank will probably take the usual steps that they take to recover any bad debt. If it is not recovered or recovered with difficulty, it will impact negatively on the OPs credit rating. A settlement with the bank to repay a lower amount and write of the rest will also impact on the OPs credit rating.

Its easy to say that in hindsight, the OP should not have gone guarantor if they could not handle the consequences of the friend defaulting. However, whats done is done and the OP needs to find the best resolution.

The solution will depend on the relationship with the friend and what type of character the friend is. If the friend is reasonable, then it could be along the lines of working out how much the friend can pay, maybe setting up a direct debit to ensure that they dont forget to pay and then paying the rest yourself somehow and reclaiming this from the friend at a later date or over a longer period of time. The fact that the OP says the friend has not paid any of the loan is not a good sign - indicates that the friend is totally irresponsible or has taken the OP for a patsy.
 
csirl said:
. A settlement with the bank to repay a lower amount and write of the rest will also impact on the OPs credit rating.
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Not doubting you but if this is true then it's best not to make a settlement but to pay all the debt.
 
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