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DH guarantor - what's my liability?

(10 Posts)
FatRedCrayon Sat 07-Oct-17 20:23:20

Can anyone help with some advice or links? DH is a guarantor for BIL who had to move recently. We obviously didn't want to see BIL homeless but what's the impact if BIL doesn't get a job and pay the rent? I have some savings (intended for renovations on our house) but if BIL defaults will they come after me for the cash? I'm not the guarantor, DH is, but we're married. Money is in an account in my name, not joint funds. Not sure how worried I should be...

PastysPrincess Sat 07-Oct-17 20:29:10

The guarantour remains liable- thats whole point of having one, so that they guarntee the money. The money in your account is safe but it doesn’t change the fact your DH has to pay it.

PastysPrincess Sat 07-Oct-17 20:34:18

What happens if I can’t pay a guarantor loan?
If you fall behind with a guarantor loan or can’t afford to pay it, the lender will ask you to catch up with payments. If you don’t do this the account will default and the lender can then ask the guarantor to make the repayments.

The debt will be dealt with using the normal debt collection process which could involve the debt being passed to a collection agency or court action being taken.

This places a significant risk on the guarantor, as they’ve agreed to repay the debt if you can’t. Any impact that the loan has on your credit file will affect both of you, in the same way as a joint debt.

If a family member or friend is your guarantor, the impact of them having to pay the debt could cause relationship problems, stress and financial difficulties.

www.stepchange.org/debt-info/guarantor-loan-debts.aspx

FatRedCrayon Sat 07-Oct-17 20:55:35

Thanks. If BIL defaults then DH has to pay, I'm on board with that. Well, neither of us would be happy if that were to happen, but I want to be sure that my money remains safe, as our bills still need paying and our children need to be fed!

Snap8TheCat Sat 07-Oct-17 21:01:23

How would you dh pay then? If he doesn’t he could end up with a ccj.

PastysPrincess Sat 07-Oct-17 21:02:04

This is not the same situation but is relevant. If the agreement is in his name only, then only he can be persued for it.
www.google.co.uk/amp/s/amp.theguardian.com/money/2010/nov/03/liable-husbands-debts

butterfly56 Sat 07-Oct-17 21:14:55

You need to look at the tenancy agreement.

FatRedCrayon Sat 07-Oct-17 21:24:03

Snap8 DH works... his salary would go towards paying BIL's debt. But we also need to eat and pay our own bills. So, if the worst would happen, I want to know I am not also liable so I can make sure me, Dh and the kids aren't in financial difficulty.

Obviously I hope BIL won't default as his situation should be ok to pay the rent! I'm only considering worst case here... it hopefully won't be an issue.

FatRedCrayon Sat 07-Oct-17 21:55:31

pastysprincess that link is really helpful, thank you.

Snap8TheCat Sat 07-Oct-17 22:03:41

Surely it doesn’t matter where the money actually comes from?

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