being a guarantor of a loan

[imajenarry]

does anyone know what would happen as a guarantor of a loan if i refused to make payments when the loan recipient is defaulting? me and bf have had to pay two consequtive months payments on the loan and are just getting excuses from bf's friend about paying us back and paying the loan. one letter from the loan company says that failure to pay the loan will affect our credit rating (which isn't the end of the world as personally we don't take out loans or finance) . we're only a few months into the loan and i really really regret saying yes to doing this.does anyone know what steps we can take with the loan company?

[CheekyChops]

Unfortunately that is the problem with being a guarantor. You are guaranteeing that you will pay the loan if the other person doesn't.

There is nothing you can do, the loan company are within their rights to chase you for the full amount.

[sandmaster]

You say you are not concerned about your credit rating. One day you may need a mortgage, finance for a car, or just an alternative bank account. These will be denied you if you have a poor credit rating.
When signing a guarantee you effectively step into the shoes of the debtor if he defaults. All the remedies open to the lender against the debtor are open to them against you.
It may seem harsh, but from the lender's point of view. they would not be in this position if you had not signed the guarantee.
Too late now, but the best advice is never sign a guarantee for someone else's debts.

[R1Geezer]

Sorry. no way out except to get the money off your so called "friend". Did it not strike you as odd that he even needed a Guarantor? It'll be because he is a dishonourable piece of sh1t that tends to welsh on debt's, personally I'd beat it out of him every month, he's just one of those people who are without honour.

[kira000]

As per the other posters, there is nothing you can dowith the loan company.
The only action you can now take is with your boyfriends friend.
It is important to follow through everything thoroughly.
First you need to sit him (the friend) down seriously, and ask him what the problem is with paying the loan, has he lost his job?

Tell him that you are taking it very seriously and explain the impact it is having on you. If he thinks you are wealthy enough to cover it without impact to you, and that as you dont get credit the poor rating wont matter, he is less likely to care. If you are doing without stuff, not sleeping with worry, and concerned about future mortgages, then it may jog him into some action.

Establish if there is anything that can be done to help him, ie, if he cant afford the whole payment so he is paying nowt, get him to pay you what he can, so you arent forking out the entire amount.

Agree with him when he is going to start paying and how much, and how he is going to repay you what he owes you. Get him to accept it is a loan, from you, and that he needs to pay it back at some point.

Even if you cant get an agreement, it is important to have a conversation and try to get something out of it.

When the conversation ends, recap what was agreed/said, no matter how it goes. Tell him you are going to write down what you discussed, so you all know where you stand Then send him a copy,preferably so he has to sign for it.

To be continued:
.

[kira000]

If he has agreed something, give him time to show he doing it, or not, as the case may be. Hopefully it will resolve itself here.

If it doesnt, then the only recourse is to tell him you will be persuing him for the money via legal means. I'm not sure how big the loan is, or if it will qualify for small claims- which is the easiest way, if it qualifies. Send him a letter, stating your intended action, and giving him a date by which he needs to come and resolve it with you before you begin. A solicitors letter may scare him into action, if you can afford it.
The important thing is to record everything, and make sure he has agreed to pay you back, and that it is not a gift from you

[sandmaster]

Note to R1geezer - you do not welsh on a debt - you welch.

[sanjaydesai]

you have no choice but to pay the debt. you have given your gaurantee that you will pay it incase your friend defaults.

[kempie]

Note to sandmaster - in the English language, welsh and welch are interchangeable in terms of both failure to honour debt (although perhaps not the most PC of terms) and of the Cymric nation cf The Royal Welch Fusiliers.

[R1Geezer]

Sandmaster/Kempie Yes I prefer the term "Welsh", it has a more appropriate spelling to it.

[alifbae]

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[imajenarry]

now 3rd payment as gone out and it'sbeyond a joke. yes i have learnt my lesson sandmaster. i'm never going to be a guarantor again. i obviously never thought this was going to happen. it was just a signature that would allow him to get the loan and that would be the last we heard of it. never dreamt the 'friend' would put us in this position .it is making us very overdrawn and stressing me out and he knows it is. seeing him a very different light now. can he put forward a different guarantor with the loan company if we twist his arm enough does anyone know?