About guarantor role?

[OriginallyfromLA]

This is very outing, but oh well, I really need advice!

I have a mental illness that was diagnosed a couple of years ago. In the year or so preceding this I exhibited chaotic, wild, behaviour and poor decision making. In this period of time I took out a high interest loan which my sister agreed to be guarantor for. She materially benefited from this stupid loan.

She willingly agreed to be guarantor, knew exactly what the circumstances would be and how it all worked.

I have never missed or defaulted on payments. There has never been any sort of inconvenience to her. Not once. She has never been contacted by them or hassled or anything like that. You can see where this is going.......

Today she has messaged me out of the blue, saying that she wants me to swap the guarantor role to my dp (not together when I originally took the loan out). She says not only is it a constant worry that she wants to get rid of, but she can't get a loan or mortgage whilst she remains as G.

For reasons I won't go into my dp won't pass the credit check so this isn't an option. He also doesn't know about the loan because I'm embarrassed to have done such a stupid thing and I really don't want to tell him.

For context: she isn't a high earner and I have gone above and beyond to treat her whenever possible, include her in family meals and outings. I pay her to house sit and dog mind. She works full time and recently told me that she was thinking about getting a second job to help make ends meet because she is "so sick of being poor". I was really concerned about this (she is single and lives alone so no support) so I mentioned it to our (wealthy) father, who thanked me and arranged to transfer her a couple of extra hundred pounds per month to help out. I told her I had done this and she hit the roof, saying her finances were her issue and she didn't want any interference. Fair enough, but I was a bit hurt and upset as I just wanted to help.

I've replied to her message saying that dp as G isn't an option and saying I'm sorry she feels it's a constant worry but there haven't been any problems.

I feel bad that it's bothering her but she knew what the deal was when she signed and telling me it's all too much now and she'd like to pull out seems unreasonable to me. I don't think I can get her out of it, if I could do a swap then I would, but there literally isn't anyone else. I asked my dad at the time and he said no - fair enough.

She hasn't replied to my message so I think she's annoyed. She's very likely to see this situation as a bad decision on my part that she got dragged into. Whereas actually, she made a conscious decision to help me out.

AIBU to think this and therefore tell her? Or am I being a CF????

Why don't you get your wealthy father to be the guarantor?

I think she may have felt bad that your father said no. This is an arrangement that is effectively blocking a mortgage application by the sounds of it. The only person I would ever guarantor would be my DC.

How much longer have you got to repay the loan? I'd ask your dad for help, especially now you can demonstrate you have been sensible and reliable in making the repayments.

How has your sister benefitted from the loan?

You need to release your sister.

How long have you left to pay on the loan? Would your father be willing to help you either by paying it off and you repay him, or helping you arrange a lower interest loan to repay the high interest one, and either needing no guarantor, or him acting as one (he might be more willing now you're in a more stable place?)

Yes, release. It puts people in Avery awkward position. DH's parents asked him to be a guarantor for his sister on her rental property and I'm so glad I talked him out of it.

There has never been any sort of inconvenience to her. Not once.

Well there is now she can’t get a loan or mortgage because of it. It’s not unreasonable that she doesn’t want to have her name as guarantor any more.

But she can't get a mortgage or her own credit, surely that's enough to want out. Would u be better going into iva if it's such a high interest loan

If you’ve made payments so far without a guarantor, can you just ask the loan company to take her off, explaining the circumstances (she can’t get a mortgage)? If you’ve already proved you can and will pay it seems unreasonable to require a guarantor.

Hi OP

I understand your concerns but my sympathy lies with your sister to be honest. At the end of the day you need to respect her wishes and find somebody else, not think ‘there is nobody else so tough’ kind of approach. You either need to consider telling your DP or ask your father/somebody else you trust. Your sister doesn’t want to be involved any longer and she helped you out initially! If you don’t you run the risk of destroying your relationship with her and at the end of the day is it really worth that?

You need to take your sister off the loan. She did it to help you out when you didn’t have any other options . Ask your dad if you must but you can’t expect her to continue like this indefinitely. It’s not fair !

And yes you are being a cf

If you've kept up payment etc for a period of time is there any chance you could now get a loan without guarantor, maybe even at a lower rate, to pay off the loan and release your sis?

She shouldn't of agreed to it in the first place and enabled u to take it if u weren't in a good head space.. how long is left.. ideally u need to get her off but if there is no one else/they won't do it then tough 💩
She will have to see it out

I'm not sure the op can just take her sister off. The loan company might not agree to it.

She agreed she should have thought about the consequences.

Out of interest how long is left and how did she benefit?

If your credit rating has improved enough could you get a new loan (without a guarantor), pay off the original loan and let your sister off that way? She’s helped you out when you needed her to and as it’s now affecting her credit it’s time you helped her out.

Your sister shouldn't have signed up for it, especially as (reading between the lines) the loan was pissed up the wall. That being said it's blocking her mortgage application, can you refinance with a respectable lender? It'll be better for you both.

You should find a way to release her as guarantor as its really not fair to her that she can't get on with her own life due to helping you out when you were in need.

I’m not surprised she hit the roof at you telling your father her private financial business! Bloody hell, why did you think that was a good idea?

She did you a favour acting as guarantor (a bloody big favour!) and she has every right to ask you to remove her - though I get that it isn’t so simple.

Why are you buying her things like meals out when you could be over paying the high interest loan?

I don’t think you’re doing her a favour by paying her to house/dog sit, either. It’s just a transaction.

Ask your dad to take over as guarantor - he refused first time, but now you can show you’ve been paying it, and he might have the added incentive that he wants to help your sister.

At the very least, get advice from a debt charity or MSE forums to get this debt gone as soon as possible (e.g. stop doing things that need you to pay a house sitter, reduce your meals out and paying for other people) and prioritise getting that debt gone. And don’t have attitude with your sister who had made an understandable and reasonable request!

For context: she isn't a high earner and I have gone above and beyond to treat her whenever possible, include her in family meals and outings. I pay her to house sit and dog mind. She works full time and recently told me that she was thinking about getting a second job to help make ends meet because she is "so sick of being poor"

Well arent you a gem. She had your back at a very bad time Stop throwing her a bone every now and again and step up and help her out now she needs you too. Make a conscious decision yourself.

Instead of treating her -and yourself- you need to be taking your additional monies and throwing it at that loan to pay it off quicker. If you can't overpay, put the extra in an account and pay it off early when you have enough.

Today she has messaged me out of the blue, saying that she wants me to swap the guarantor role to my dp (not together when I originally took the loan out). She says not only is it a constant worry that she wants to get rid of, but she can't get a loan or mortgage whilst she remains as G.

I doubt the lender would accept a DP as guarantor regardless of their financial history. I also think they'd take a dim view of,

She materially benefited from this stupid loan.

As I understand it, your guarantor cannot be financially connected to you - family/friends are ok, but no partner or spouse. The guarantor benefiting from the loan is almost certainly a no-no.

Get some proper debt advice and explore your options.

Guarantor loans are tricky.

My BIL has one that my MIL guaranteed. He now can't afford to pay it so rang step change and 2 other charities who all told him that companies like amigo and other guarantor loans won't enter into anything becauseni they don't get the money off you they will just go to the guarantor.

I don't think you can take them off either because they have signed into the contract with you so therefore owe it if you don't pay it