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Original poster

Loan to family ?

16 replies

gillys · 12/09/2019 16:42

Hi All.
SiL recently divorced, currently sorting financial affairs. Her ex wants £25,000 from the house. She doesn't want to sell, so wants to buy him out. However there is a ccj on the property ,( from the ex) so she can't get any credit or loans.
She wants my DH , her brother, to take out a loan on her behalf & she will pay him back monthly. She is currently self employed & earns reasonable money.
I am worried sick about this. Not looked into loan details yet but am guessing this will be over at least a 10 year period. This will surely impinge on any future plans we might have, such as moving or possibly needing a loan ourselves.
DH is also self employed & earns good money but I'm so worried about any pitfalls.
Advice & thoughts please.

OP posts:

Lemon27 · 12/09/2019 16:51

What is a CCJ? What happens if she doesn’t pay the ex? Can he force her to sell?

I’d be very wary of this, because of the large amount and the length of time if it was 10 years. It definitely could impact on future plans of yours. It depends really on how much you want to help her and if you can afford to be tied up for so long.

I did this for my sister last year when a new house she wanted to buy came up at short notice. However we are incredibly close and I offered to do it she didn’t ask me. It was £9k over 5 years tho and she’s over paying every month to get it paid down early. So I knew it wouldn’t impact me majorly or for long. I will want to change my car in the next few years and will want a car loan so I’ll be asking her to try get it paid off ASAP for that reason.

What happens if she stopped working and you had to make the repayments, could you afford it or would it put you in a difficult position?

Also, I got my sister to sign a legal loan agreement with me matching the terms of my bank loan. So I’d suggest you do the same if you decide to go ahead to have some kind of legal protection.

Raphael34 · 12/09/2019 17:01

A ccj is a county court judgement. Which means she already defaulted on a payment of something to the point she’s been taken to court, but then STILL hasn’t paid it so they’ve had to issue a ccj against her. Which shows she’s already unreliable with money. If she’s not bothered about getting in debt herself, why would she be bothered about getting someone else in debt?

The pitfalls are obvious. She could stop paying and you could be landed with a 25k debt, more if there ends up being court/bailiff fees. If you’ve not got the cash to give them yourselves then they could end up taking your property/car etc. What if she loses her job, becomes too sick to work, or simply decides she’s not paying? Even if she does pay you’re potentially screwed if you ever need to borrow money yourselves. If you ever go for a loan/mortgage in the next ten years they’ll look at your outgoings or any debts and this will be counted against you. You’re daft for even considering it imo

GreatBigNoise · 12/09/2019 17:07

I’ve no expertise in this area at all so take my suggestion for what it is.

What about you and your husband buying a share in your SILs house then at least you have something tangible for your money. Not sure how it would work legally but I presume it can be done.

stanski · 12/09/2019 17:30

There can't be CCJs in the property; rather on the person. There may be a charge on the property. If he had a CCJ and they were financially linked then she it would affect her credit but I don't believe the property per se can have a CCJ.

Raphael34 · 12/09/2019 19:02

Agree with stanski. I’ve only just noticed you say there’s a ccj on the property. It doesn’t work like that. A ccj is issued against the person who refused to pay the debt. If she can’t get a loan because of a ccj, then it’s her who’s been issued a ccj.

Berthatydfil · 12/09/2019 19:11

OMG no way.
Can you afford to give her 25k ?
If you can then great go for it. If not then don’t do it.
You could offer to buy the ex out properly via a mortgage so you have some security on the loan she pays the whole mortgage as rent for your half of the house and in however many years she remortgages and buys you out. If she defaults you can force a sale.

SeaSidePebbles · 12/09/2019 19:36

you need to learn everything about that ccj. Not sure how it works, but if you have a property, can’t they make you sell it to recoup the money?

If it’s just a straightforward 25 grand and that’s it, yes, of course I would, but my brother is the only person in this whole world that I fully trust would pay me back.

Original poster

gillys · 12/09/2019 21:06

Have been questioning DH about the ccj. Told him it is on the person not the property. He's adamant it is SiL 's ex who is responsible for it.

Going to speak to SiL myself tomorrow to find out why she can't apply for this loan herself.

OP posts:

stanski · 13/09/2019 08:06

@gillys for starters I would pull the title deeds of the property from the land registry website (costs £3) and is done here - eservices.landregistry.gov.uk/eservices/FindAProperty/view/QuickEnquiryInit.do - and you will see what is registered as a debt against that property - you won't see how much, but every person / company that has a charge against it, will be listed (for example mortgage). Then you would know if it's a charge against the property.

Secondly you can look up your SIL and BIL for CCJs. It costs £10 per name and is done here search.trustonline.org.uk/Search/Person that will tell you how much is registered against each of them.

Then have a chat with her and see if what she tells you matches up to what you have found. Whatever you do, please DO NOT give the money before getting her to sign a legal loan agreement with a solicitor.

Original poster

gillys · 13/09/2019 09:05

@stanski

Thank you for that link, will look into it. Think I have convinced DH this is a bad idea & SiL will have to look for alternatives

OP posts:

StressyDressyHeels · 13/09/2019 09:07

I wouldn’t get involved. Sounds messy and risky.

Bouffalant · 13/09/2019 09:16

No way. Unless you can afford to give away £25k.

Xenia · 13/09/2019 11:17

Wise advice above and do check the land register as she seems not to understand CCJs - now of course there may be a secured charge over the property taken out because she or her ex did not pay a court judgment - even more reason not to lend the money.

Please tell her to have a solicitor daw up a full consent order which must be seakled by the court otherwise the husband could take the £25k now and next year claim another £25k. It is vital she gets a clean break on the capital assets. I don't know if maintenance will be paid but best she seems a solicitor.

Fluffycloudland77 · 16/09/2019 21:56

I wouldn’t do this, money and family are oil & water.

BarbaraofSeville · 17/09/2019 07:48

It could be the ex that has the CCJ but if they have/had a joint mortgage or current account within the last 6 years, then her credit rating will also be affected, hence not being able to get a mortgage. Also, like Xena says, if a CCJ has gone unpaid, it could have led to a charge on the property.

Or she might not make the affordability on paper, and being self employed doesn't help - those factors add up to a specialist mortgage that might not exist or could be expensive.

Have they had legal advice about the finances as part of the divorce? It sounds like they need it.

AMAM8916 · 18/09/2019 08:19

Don't do it. CCJ's are issued against a person and if it's affecting her getting credit, it was her that got the CCJ.

Finicial links don't matter when the debt the CCJ was issued for wasn't a joint debt.

If I was to get a CCJ for not paying a phone bill for example that was in my name, it wouldn't affect my husband that I have a mortgage with. It would only affect him if our joint debt wasn't paid (the mortgage)

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