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Guarantor

Posted by sandra46-681487 - Created: 8 years ago
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5 replies (Showing replies: 1 to 5)

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Posted by lime-676998 - 8 years ago

It all depends upon the terms of 'guarantee' agreement - whether your son has a joint and primary obligation to pay, or merely a secondary obligation to indemnify. It also could depend upon the terms of sale agreement of the caravan from the 'company' to the 'friend' - whether there are any particular provisions stipulated as to event of default on payments.


As for claiming possession of the caravan, generally guarantee agreements do not entitle the guarantor to claim any rights under the sale agreement. 


I would suggest reviewing the documents very carefully before deciding on how to proceed.

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Posted by sandra46-681487 - 8 years ago

Many thanks to all the kind people who have taken time to give advice. i have duly passed this on to my son to give him some idea of where to go with this.

thank you all.

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Posted by baxi-666881 - 8 years ago

i suppose a lot depends on whether the friend is still a friend or not ? . try to get possesion of the caravan , at least possesion is 9/10 the law , did he have a written agreement ? if they were to sell it would it cover the debt ? .

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Posted by johnners-660966 - 8 years ago

Hi Sandra,

As Yoshik suggested get your son to go to the CAB and discuss this with them.

In the meantime you can do some research of your own, go to this site and post your question.

http://boards.fool.co.uk/Index.aspx

The Managing Your Finances - Dealing With Debt section is a good place to post your query. You'll get lots of useful advice.

Johnners

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Posted by Yoshik - 8 years ago

As a guarantor the lender will look to your son for recompense. Of course they have a duty to pursue the principal lender but if there is another simpler option then they will take that course.

If your son stops payment then they will sieze the caravan, but does it equal the debt? If not your son could be pursued for any shortfall on realisation of the asset.

Your son does of course have a legal right to sue his friend as he is paying his debt but I am not sure how far he would get as the person seems a little light on honesty.

One point to remember is that if your son stops payment he will be registered as a defaulter and thus a bad credit risk.

His best option is to talk to his friend, see if the caravan can be sold, but remembering that if the sale does not cover the balance due, any residue is immediately payable.

As solicitors cost money I suggest he may pay a visit to CAB.