marzman Posted May 6, 2017 Share Posted May 6, 2017 (edited) Hi guys, Genuine serious question which i need some input on please. My wife's sister is married and has 3 kids under 10. Their marriage has been broken for a long time, and she's planning to leave him imminently, although he doesnt know this yet. Her plan is to rent a house and move out one day whilst he is at work. The problem with this is that their financial situation is dire - they're in negative equity in their house, they almost declared bankruptcy a couple of years ago, they've got mountains of loans/credit cards which they're paying off at £1 per month due to some agreement they made, and both of their credit scores are the lowest of the low. My sister-in-law has now asked my wife and I to be the guarantor for her new lease - 12 months at £600 p/m. Being a guarantor means that should she fail to pay her rent, I will be financially liable to pay for it (£7200 for the year!) Now i'm 100% on her side that she needs to leave her husband, but at the moment we're close to falling out as so far i've said no to being a guarantor for the following reasons: Selfish reasons I dont want to be exposed to paying £600 per month, but can afford it Moreover, i absolutely don't want to be 'financially linked' to them and their appalling credit score. Will being a guarantor for her mean we are financially linked (you know, when you do a credit check and it shows the names of anyone you're linked with)? I protect my credit score vehemently as i don't want to get a poor interest rate or rejected for a loan or mortgage etc. [*]Unselfish reasons Moving out without telling him is wrong and irresponsible Signing up to a rental contract takes away a lot of avenues to sorting this out amicably, and fairly for the both of them If she moves out, we fully expect him to refuse to pay the mortgage and the house will be repossessed. The mortgage is in both their names so will have bad consequences long term for both of them Starting this process with such a negative/aggressive maneuver will likely set the tone for the remainder of the divorce - i'm sure he will want to play hard ball after this - i would! I've tried to talk to her to make her understand these points, but so far she is unwilling to listen - hence why we are beginning to fall out. I feel like i'm being guilt-tripped into doing this? Am I in the wrong here and need to lighten up? So far i've suggested the following alternatives: Her & 3 kids move in with us for a few months - we've got a 5 bed house and would barely notice them here tbh! This would invoke the separation and we can then see what his next move is before planning hers - leaving more options open for everyone She asks him to leave and she stays in the house, and they figure out how to pay the mortgage and his rent - but doing this she'll lose the housing benefit she would get by renting, which she needs Both move out and they rent their house out. Okay i'll still need to be a guarantor to achieve this, but I dont want their house to be repossessed affecting both their and potentially our credit. I've suggested that I could be a mediator for the both of them, but i don't expect them to take me up on this offer... it's going to be a very messy divorce i think. tl;dr Is it safe to be a guarantor for someone with terrible credit?? Edited May 10, 2017 by marzman Quote Link to comment Share on other sites More sharing options...
ATTAK Z Posted May 6, 2017 Share Posted May 6, 2017 My opinion: Let her and the kids live with you on a strictly temporary basis ... I think that is more than generous 6 Quote Link to comment Share on other sites More sharing options...
marzman Posted May 6, 2017 Author Share Posted May 6, 2017 Thanks Hugh. This is my preference but she's so far refusing as she wants her own space, she says its too much of an inconvenience for her (we live 15 mins away), and the kids don't like our dog. :-( Quote Link to comment Share on other sites More sharing options...
ATTAK Z Posted May 6, 2017 Share Posted May 6, 2017 Also if you can, don't let the mortgage payments lapse ... as the property is in negative equity, when it's repossessed the balance will be a debt until it's paid in full Quote Link to comment Share on other sites More sharing options...
ATTAK Z Posted May 6, 2017 Share Posted May 6, 2017 Thanks Hugh. This is my preference but she's so far refusing as she wants her own space, she says its too much of an inconvenience for her (we live 15 mins away), and the kids don't like our dog. :-( She should be made aware that she's not in a position to refuse your kind offer ... and her kids should decide if they prefer to live with their Dad or your dog 3 Quote Link to comment Share on other sites More sharing options...
Ekona Posted May 6, 2017 Share Posted May 6, 2017 NO NO NO NO NO Never go guarantor unless you're 100% prepared to lose the money. Ever. She's being a total idiot about the whole thing and just burying her head in the sand, which is never going to end well. By all means leave your husband, but the kids stay with him if you're too cowardly to confront: The kids should remain in the family home for their stability. Honestly, stay well clear of this. You're going to massively regret it otherwise, I can see it happening now. This has clusterf*ck written all over it. 16 Quote Link to comment Share on other sites More sharing options...
Strudul Posted May 6, 2017 Share Posted May 6, 2017 Agree with all the reasons in the OP and Hugh's recommendation. To be blunt, tough shite for her if it's an inconvenience. She's asking for a favour and it's not up to her to determine what that favour is. 2 Quote Link to comment Share on other sites More sharing options...
marzman Posted May 6, 2017 Author Share Posted May 6, 2017 Also if you can, don't let the mortgage payments lapse ... as the property is in negative equity, when it's repossessed the balance will be a debt until it's paid in full This I didn't know, thanks. I'll find out a little more about this and use it in the conversation. NO NO NO NO NO Never go guarantor unless you're 100% prepared to lose the money. Ever. She's being a total idiot about the whole thing and just burying her head in the sand, which is never going to end well. By all means leave your husband, but the kids stay with him if you're too cowardly to confront: The kids should remain in the family home for their stability. Honestly, stay well clear of this. You're going to massively regret it otherwise, I can see it happening now. This has clusterf*ck written all over it. I know what you're saying and my head's saying the same but it is family at the end of the day - you can't turn your back on them. We're the only family she's got. * On a lighter note I must point out that whilst this appears to be a proper Coronation Street style drama, it does not reflect in any way me or the rest of our family's affairs. This is an isolated issue. 1 Quote Link to comment Share on other sites More sharing options...
ATTAK Z Posted May 6, 2017 Share Posted May 6, 2017 Outstanding mortgage is say £200,000 Bank repossesses property and puts it up for sale I make the highest offer (£120,000) and get a cheap house It costs Bank £10,000 to repossess, market and sell Outstanding debt (which the Bank will sell on to Company X) = 200,000-120,000+10,000 = £90,000 Company X will pursue the outstanding debt ... with further charges I and the Bank are the only happy bunnies Quote Link to comment Share on other sites More sharing options...
Stutopia Posted May 7, 2017 Share Posted May 7, 2017 Offering her a place to live is very generous and not to be sniffed at. Only you know if the guarantor route is something you want to do, like most things, go with your first reaction. If you're continuing to offer a roof over their head, you've already made an offer that is worth considering, and there's no reason you should feel guilty about not wanting to be financially entangled with them. You're not forcing them on to the street. 1 Quote Link to comment Share on other sites More sharing options...
TT350 Posted May 7, 2017 Share Posted May 7, 2017 I don't know her but she sounds like a Quick Fix kind of person. Irresponsible. Does he beat her? If so then it's ok to leave like she intends. I think you probably can't win with regards to being a guarantor. If you do, I think she'd leave you in a pikle sooner or later. The excuse she gave about living with you as being too inconvenient sounds like a lot of BS. She wants money for something. I don't know what. All the best with a tricky situation. Quote Link to comment Share on other sites More sharing options...
Ekona Posted May 7, 2017 Share Posted May 7, 2017 So if you don't go guarantor, and she doesn't move in, what's her plans? If she cannot afford to move out on her own as she's a bad credit risk, then how can she afford to support three kids whilst the courts sort out payments from Dad? If he just gives up and goes bankrupt then there's no money coming in from him, are you ultimately going to end up supporting the kids instead? Noble in theory, but that's going to get pricey in the long run. She simply hasn't thought any of this through. If she wants to leave him fine, but sit down and tell him and make rational decisions together for the sake of the kids. They're the important ones, not her. Quote Link to comment Share on other sites More sharing options...
The Bounty Bar Kid Posted May 7, 2017 Share Posted May 7, 2017 (edited) NO NO NO NO NO Never go guarantor unless you're 100% prepared to lose the money. Ever. She's being a total idiot about the whole thing and just burying her head in the sand, which is never going to end well. By all means leave your husband, but the kids stay with him if you're too cowardly to confront: The kids should remain in the family home for their stability. Honestly, stay well clear of this. You're going to massively regret it otherwise, I can see it happening now. This has clusterf*ck written all over it. This all the way. Guarantor has so many risks. Say she has all the best intentions in the world but something goes wrong. It doesn't just mess her up for a while. It has the potential to mess you up for a very long time. Getting her to stay with you is the safest and best all round solution. Edited May 7, 2017 by The Bounty Bar Kid Quote Link to comment Share on other sites More sharing options...
The Bounty Bar Kid Posted May 7, 2017 Share Posted May 7, 2017 If I agree to be a guarantor could my creditworthiness be affected? Dear James, I have been asked to be a guarantor for a family member. I'm sure they will make their payments. My question is does the loan amount show on my credit file and does it count as my debt and will it effect my chances of applying for credit? Is this debt (although not mine unless payment is failed) taken into consideration when lenders decide if to lend me money. Anna, London Dear Anna, When you guarantee a credit agreement you are taking on a degree of responsibility for the debt, but not in quite the same way as entering a joint credit agreement. While the terms and conditions of guarantor agreements can vary, we wouldn’t expect to see a record of the agreement on the guarantor’s credit report (as would be the case with a joint account), unless of course the agreement defaulted. In that case, you may well see a default registered on your credit report too and, if payment was still not forthcoming, perhaps a county court judgment as well. So, as long as the family member pays the agreement on time every month – which I’m sure they will! – the debt will not show on your credit report and should, as a result, have no bearing on your own credit rating. (March 2012) Taken from Experian http://www.experian.co.uk/consumer/questions/askjames231.html 1 Quote Link to comment Share on other sites More sharing options...
sipar69 Posted May 7, 2017 Share Posted May 7, 2017 Surely she could rent from a landlord advertising their property themselves rather than using a letting agency. She wouldn't need a guarantor for that. Quote Link to comment Share on other sites More sharing options...
gangzoom Posted May 7, 2017 Share Posted May 7, 2017 Her & 3 kids move in with us for a few months - we've got a 5 bed house and would barely notice them here tbh! Three kids under 10.....Oh you WILL notice them, just make sure you catch up on your sleep before they move in!! 1 Quote Link to comment Share on other sites More sharing options...
-G- Posted May 7, 2017 Share Posted May 7, 2017 (edited) My tuppence. A moonlight flit involving kids is probably the worst thing you could possibly do. In terms of stoking up acrimony (or more if it already exists) it is also not far off of "child abduction" and I doubt many people will see it as justified or proportional. If your sister in law fears for her safety in telling her husband that she's leaving him, she needs to contact the relevant social services & authorities to explain her situation to them before taking drastic action like buggering off with the kids. If they were childless, it'd be a no brainer - get out. There is the other aspect that you will invariably end up partly responsible for her "abducting" the kids & that will involve you further in what should ultimately be a private affair This is not an isolated, one in a million event - it happens all the time. https://www.citizens...n-you-separate/ Edited May 7, 2017 by -G- 1 Quote Link to comment Share on other sites More sharing options...
gangzoom Posted May 7, 2017 Share Posted May 7, 2017 My sister-in-law has now asked my wife and I to be the guarantor for her new lease - 12 months at £600 p/m. Being a guarantor means that should she fail to pay her rent, I will be financially liable to pay for it (£7200 for the year!) So your wife will essentially be legally responsible for paying her sisters rent indefinatly to the tune of £600/month....What's the longterm plan for this? £600/month post tax is about £1K a month of your pretax earning now going towards paying for some else housing, that's very generous of you. As for getting a mortgage for your selves later, having just been through the process recently I was shocked how careful they check everything theses days, £600/month disappearing is not going to go unnoticed. Quote Link to comment Share on other sites More sharing options...
ioneabee Posted May 7, 2017 Share Posted May 7, 2017 Just another point to note rental leases are usually 6 months with 1 month notice to quit after that so, if she defaults, you would be liable for up to 6 months and for as long as she decided to stay there after that Plus any prospective landlord would likely after reviewing the credit score insist on that 1st 6 months up front in total Quote Link to comment Share on other sites More sharing options...
coldel Posted May 7, 2017 Share Posted May 7, 2017 I am no expert in many of the things described above but the opening comments would ring alarm bells for me, just upping and leaving whilst he is at work. Who knows what the personal situation is (domestic abuse or the like?) but if the partner has done nothing wrong and she does a runner with the kids then all sorts of legals he brings could suddenly become part of the equation including custody battles and the immense stress that must bring. It feels like she is going to enter a traumatic period of her life, either you could be there for support when she needs it or you will live it day to day - worth considering how that might impact your life, its going to be a lot more than them taking up a couple of spare bedrooms I would think? Quote Link to comment Share on other sites More sharing options...
leonk Posted May 7, 2017 Share Posted May 7, 2017 (edited) Chris, please don't stand guarantor. It's clear there is a history of not being able to manage her finances, why will this change. Letting them stay with you short term also has its risks as well. Will your address be her new address for the bank and other creditors to contact her? Please, please be careful as this could also affect your own relationship. Phone me anytime mate if you need a chat. Edited May 7, 2017 by leonk 2 Quote Link to comment Share on other sites More sharing options...
marzman Posted May 7, 2017 Author Share Posted May 7, 2017 Thanks everyone for this valuable input. To clarify, there is no domestic violence here - their problems are financial and infidelity. He has 'allegedly' opened credit accounts in her name without her knowledge, as well as strongly suspected but no proof of cheating. I don't know her but she sounds like a Quick Fix kind of person. Yes, i think this is accurate. If she cannot afford to move out on her own as she's a bad credit risk, then how can she afford to support three kids whilst the courts sort out payments from Dad? Using the benefits that she is/will be entitled to, as well as her part time salary. I've worked out her budgets with her and she needs the benefits to live on her own. Taken from Experian http://www.experian....skjames231.html Thanks BBK. Whilst not a definitive answer int hat post, this is the kind of thing im looking for. Surely she could rent from a landlord advertising their property themselves rather than using a letting agency. She wouldn't need a guarantor for that. Good shout. This is something we'll look in to. A moonlight flit involving kids is probably the worst thing you could possibly do. In terms of stoking up acrimony (or more if it already exists) it is also not far off of "child abduction" and I doubt many people will see it as justified or proportional. Abduction - jeez i guess you're right. Just another point to note rental leases are usually 6 months with 1 month notice to quit after that so, if she defaults, you would be liable for up to 6 months and for as long as she decided to stay there after that Plus any prospective landlord would likely after reviewing the credit score insist on that 1st 6 months up front in total Yep should have mentioned i'd talked her down to a 6-month lease initially - but 6 months rent up front? Ouch i've not encountered that before. It feels like she is going to enter a traumatic period of her life, either you could be there for support when she needs it or you will live it day to day - worth considering how that might impact your life, its going to be a lot more than them taking up a couple of spare bedrooms I would think? Good shout Col. It's the kids i'm really keen to help though, and am prepared to make some sacrifices to make sure they're okay and stable. Quote Link to comment Share on other sites More sharing options...
coldel Posted May 7, 2017 Share Posted May 7, 2017 Good luck with whatever decision you take mate, not a nice decision to have to take to break up a family but my look out would also be what G raised, in that if she just runs off with the kids because of a financial situation the courts might not look on that favourably in terms of custody, I mean they could look on her as a flight risk? As I say, good luck pal. 1 Quote Link to comment Share on other sites More sharing options...
marzman Posted May 7, 2017 Author Share Posted May 7, 2017 Chris, please don't stand guarantor. It's clear there is a history of not being able to manage her finances, why will this change. Letting them stay with you short term also has its risks as well. Will your address be her new address for the bank and other creditors to contact her? Please, please be careful as this could also affect your own relationship. Phone me anytime mate if you need a chat. Christ, i hadn't thought of this... Thanks mate. The theory is that the husband is the one that's irresponsible with money and she is just naive and thats why they're in this situation, but i see your point. Good luck with whatever decision you take mate, not a nice decision to have to take to break up a family but my look out would also be what G raised, in that if she just runs off with the kids because of a financial situation the courts might not look on that favourably in terms of custody, I mean they could look on her as a flight risk? As I say, good luck pal. Cheers mate, i'll make her aware of all of this. Quote Link to comment Share on other sites More sharing options...
ioneabee Posted May 7, 2017 Share Posted May 7, 2017 Just another point to note rental leases are usually 6 months with 1 month notice to quit after that so, if she defaults, you would be liable for up to 6 months and for as long as she decided to stay there after that Plus any prospective landlord would likely after reviewing the credit score insist on that 1st 6 months up front in total Yep should have mentioned i'd talked her down to a 6-month lease initially - but 6 months rent up front? Ouch i've not encountered that before. yep - 6 months up front - I've just done that with a new tenant - situation is - couple just moving in, his ex-partner ran up credit bills and left them with him - he's paying them off under an agreed payment scheme - but that makes his credit score low Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.