Help! How can I help my DM to get out of being a guarantor on a loan?

[TealAndTurquoise]

I've just found out that my aunt persuaded my DM to act as a guarantor on a loan several months ago. The loan is for £4,000 and repayments are £158 a month over 5 years so you end up paying back £9,500!

I've been furious ever since I found out. I'm angry with my mum for agreeing and angry with my aunt for asking in the first place. Even worse, she persuaded my mum to keep it a secret from me and my DSis. DM said she said no several times but my aunt kept on at her and wore her down by promising faithfully to keep up with the repayments.

Rather predictably, my aunt has now missed 2 payments. The loan company took July's payment out of DM's bank account and has tried to take August's but were unsuccessful as DM didn't have enough money in there. They're now really hassling her by phone and text message.

A bit of background - my aunt has always been terrible with money. She's always behind with bills, spends money she doesn't have on designer handbags and tat from QVC, goes on several holidays abroad a year and spends a lot on socialising. She works part time and sometimes earns extra doing overtime. She owes me several hundred pounds from years ago and I let it go as she's family and I didn't want to fall out with her but I vowed never to give her money again.

My DM is a retired widow and my parents worked hard and saved so she could have a comfortable retirement. She's certainly not loaded and lives very frugally. I can't remember the last time she bought something nice for herself or went on holiday. She is very kind and will help people when she can. She's extremely naive and always thinks the best of people. She's lent money to people before and was not paid back. It's well known in the family that DM is a soft touch and that if you ask enough you'll eventually get what you want from her.

I really feel like my aunt has massively taken advantage and it has taken all my willpower not to call her and give her a piece of my mind since I found out. What can I do to help my DM get out of being a guarantor? Has anyone ever been in the same situation?

What age is your mum?

If it was my mum, who has capacity but is elderly therefore vulnerable, I would be around at the aunts, with her adult children present, get everything out in the open and ask how it is going to be paid.

I would not expect my cousins to financially help as they weren't daft enough to guarantee their mums loan, but they can agree their mum is in the wrong and perhaps help her/pressure her to organise her finances so she does pay the loan.

If my mum was 20 years younger (in her 60s), I would tell her she signed as a guarantor, it is between her and aunt, and she is now stuck with the consequences. I would make suggestions of what she can do (if possible pay off loan to avoid interest and protect her credit rating and then take aunt to small claims), but leave it to her to do. If she wanted to take to small claims I would probably help her work out how to do that.

I would not expect my cousins to financially help as they weren't daft enough to guarantee their mums loan, but they can agree their mum is in the wrong and perhaps help her/pressure her to organise her finances so she does pay the loan.

Good advice.

@ukgift2016 - I've only found out about all this in the last few days so I'm trying to get all the facts out of DM so we can assess and decide the best way forward.

@WeAllHaveWings - she is 70.

I think DM should pay off the loan now and then we can get my aunt to pay her back and take her to small claims court if necessary. Dsis wants to complain to the loan company and tell them that DM was coerced but I don't think that's going to work. We're going to have a proper talk today and agree a way forward and I'm also going to research POA and have that talk with DM.

Thank you so much to all of you who have replied with advice and your experiences. I was so shocked when I found out about all this a couple of days ago and I needed a place to vent and I knew I'd get good help and advice on here.

Good luck Teal. I hope you and your sister can work this out - and your mother finally sees the light or is at least cooperative with you both, for her own mental and financial wellbeing. 🌹

Look up coercive control with regards to domestic abuse. This counts. Family member to family member = domestic abuse. Ask Citizens Advice for help. I'm aware that they are helping someone local who was taken advanced of in a very similar way.