Does my Granddaughter have to repay her brothers loan?

[Guest]

My Granddaughter stood guarantor for her brother when he took out a £2000 loan over 24 months online with Bamboo.

He moved to another County, much of his work dried up and he stopped making payments after 12 months. He has recently made an agreement with Bamboo solicitors to make a much reduced monthly repayment. However, the solicitors are now threatening my Granddaughter with court action unless she agrees to make payments too.

As Bamboo and my grandson have made this latest agreement should my Granddaughter also be making payments?

[ostell]

As the granddaughter stood as guarantor then yes she is liable. That is what being a guarantor is all about.

[Ceejaylo]

Thanks for taking the time to answer Ostell... I do understand that as guarantor my Granddaughter would be liable for the bebt, but I thought they would only come to her for payments if her brother was not making payments, but he is, . as I said, her brother and the loan company have now agreed a lower, manageable repayment plan.. are you saying that irrespective of this, my Granddaughter also has to make payments which the loan company are demanding she make? That not only was she signing to guarantee repayment of the loan but that she was guaranteeing it would be repaid at the original repayment fugure?

[james_law]

Thanks for taking the time to answer Ostell... I do understand that as guarantor my Granddaughter would be liable for the bebt, but I thought they would only come to her for payments if her brother was not making payments, but he is, . as I said, her brother and the loan company have now agreed a lower, manageable repayment plan.. are you saying that irrespective of this, my Granddaughter also has to make payments which the loan company are demanding she make? That not only was she signing to guarantee repayment of the loan but that she was guaranteeing it would be repaid at the original repayment fugure?

She guaranteed the loan in all aspects of payment, time etc. If her brother is not paying the amount that was stated in the contract, then they can either pursue your daughter for the full monthly amount or the shortfall between the amount paid and amount owed.

To clarify this point, I'd look into the contract your Granddaughter signed.

[pt2537]

Before discussing liabilities, first you need a copy of the Guarantee, there are many reasons a PG can fall over, so its worth checking to see if the guarantee is valid and if the primary obligations havent been met so as to entitle the creditor to call in the debt from the guarantor. Often it is overlooked but if its a CCA regulated debt and the creditor hasnt complied with the statutory duties, then he cannot call in the debt via the guarantee.

Natwest v Lock as a prime example