Getting (some) satisfaction after losing money
Discussion
Hi All,
It is not without considerable dismay, that I write this message.
My stepson is at University in Scotland and doing rather well on his degree - thank goodness !.
Last September (at a time when he was in UNI) a letter arrived at our home in Shropshire - addressed to him. The envelope had 'Amigo Loans' on it, so out of concern, we opened it. The letter thanked him for being a guarantor, for a loan that a 'friend' of his had taken out for £4,000 - to be repaid at £200 per month, over 3 years. His 'friend' is not a student, but someone that he met in Edinburgh - which is where the 'friend' lived and worked - though we believe he has now moved to Wales.
As we expected, his friend made the first payment, but has defaulted on the rest. We sent a letter - a kind of 'plea for help', to the 'friend's' parents, to see if they might intercede, following which, they made two monthly payments - but these then stopped. Our son has made three payments, but no further payments have been made since March.
Of course, we've ranted and raged at our son, but this is pretty futile and does nothing constructive to address the situation - ultimately, he is liable as guarantor, for the full amount owed. I've thought long and hard about the situation; we really don't want the lad to have a CCJ against him - that could really jeopardise his prospects of getting a job and home in the future.
I've decided, it would be better for us to pay off the debt in full - asap. The problem being, that the loan is (and will continue) to accrue interest at an extortionate rate - currently, it would cost about £4,000 to pay off the loan - the loan amount is what it was originally, as payments have been missed. If it were paid off over the next three years (or longer), the total of the repayments would be significantly higher than the £4,000 that might be paid now - especially as quite a few payments have been missed.
Although it would be (very) 'painful' to pay off the lot in full, it would clear the debt and hopefully, we (and our son) would be able to put the matter behind us - better than paying off the loan on a monthly basis for the next few years.
Now we are getting to the part where I'd really appreciate your help - if we pay off the loan in full, that will be the matter 'done & dusted'. However, it rather 'narks' me, that his 'friend' will get off, having made only one payment - and his credit history will be unaffected.
Is there any form of action that we (my son) could take against the smug little b@st@rd ? . . . realistically, it'll have to be some form of legal action .
The impression I have (which may well be wrong), is that under Scottish Law, the (Guarantor - my son) who discharges the liability (by paying off the loan), is be entitled to assignment of all securities held by the creditor. Assuming, that is, that they have any assets. That said, we've heard that the scumbag is now living in Wales - so if we were to go after him, which legal body might we use ?
Might there be on scope for action via MoneyClaim (or the Scottish equivalent) ?
Or is the only option, a voodoo doll and a few long pins . . . or is there something else ?
It is not without considerable dismay, that I write this message.
My stepson is at University in Scotland and doing rather well on his degree - thank goodness !.
Last September (at a time when he was in UNI) a letter arrived at our home in Shropshire - addressed to him. The envelope had 'Amigo Loans' on it, so out of concern, we opened it. The letter thanked him for being a guarantor, for a loan that a 'friend' of his had taken out for £4,000 - to be repaid at £200 per month, over 3 years. His 'friend' is not a student, but someone that he met in Edinburgh - which is where the 'friend' lived and worked - though we believe he has now moved to Wales.
As we expected, his friend made the first payment, but has defaulted on the rest. We sent a letter - a kind of 'plea for help', to the 'friend's' parents, to see if they might intercede, following which, they made two monthly payments - but these then stopped. Our son has made three payments, but no further payments have been made since March.
Of course, we've ranted and raged at our son, but this is pretty futile and does nothing constructive to address the situation - ultimately, he is liable as guarantor, for the full amount owed. I've thought long and hard about the situation; we really don't want the lad to have a CCJ against him - that could really jeopardise his prospects of getting a job and home in the future.
I've decided, it would be better for us to pay off the debt in full - asap. The problem being, that the loan is (and will continue) to accrue interest at an extortionate rate - currently, it would cost about £4,000 to pay off the loan - the loan amount is what it was originally, as payments have been missed. If it were paid off over the next three years (or longer), the total of the repayments would be significantly higher than the £4,000 that might be paid now - especially as quite a few payments have been missed.
Although it would be (very) 'painful' to pay off the lot in full, it would clear the debt and hopefully, we (and our son) would be able to put the matter behind us - better than paying off the loan on a monthly basis for the next few years.
Now we are getting to the part where I'd really appreciate your help - if we pay off the loan in full, that will be the matter 'done & dusted'. However, it rather 'narks' me, that his 'friend' will get off, having made only one payment - and his credit history will be unaffected.
Is there any form of action that we (my son) could take against the smug little b@st@rd ? . . . realistically, it'll have to be some form of legal action .
The impression I have (which may well be wrong), is that under Scottish Law, the (Guarantor - my son) who discharges the liability (by paying off the loan), is be entitled to assignment of all securities held by the creditor. Assuming, that is, that they have any assets. That said, we've heard that the scumbag is now living in Wales - so if we were to go after him, which legal body might we use ?
Might there be on scope for action via MoneyClaim (or the Scottish equivalent) ?
Or is the only option, a voodoo doll and a few long pins . . . or is there something else ?
pubrunner said:
Might there be on scope for action via MoneyClaim (or the Scottish equivalent) ?
As far as I know, there is no Scottish equivalent of MoneyClaim. But since the both the defaulter and your son have service addresses in England or Wales I doubt it would be a problem to proceed with a MoneyClaim.
IANAL!
Has the debt been sold on to a debt collector yet? I say this as if it has there is a strong chance you will be able to settle for much less than the full amount. However not sure if this would have an affect on your sons credit. Someone else might be able to tell you whether the defaults would be registered against your son or the other person at present.
JM said:
As far as I know, there is no Scottish equivalent of MoneyClaim.
But since the both the defaulter and your son have service addresses in England or Wales I doubt it would be a problem to proceed with a MoneyClaim.
IANAL!
Unfortunately, whilst we know that the defaulter has moved to Wales, we don't know his exact address. At the time the loan was taken out, he was living at the family home in Edinburgh.But since the both the defaulter and your son have service addresses in England or Wales I doubt it would be a problem to proceed with a MoneyClaim.
IANAL!
scoey1001 said:
Has the debt been sold on to a debt collector yet? I say this as if it has there is a strong chance you will be able to settle for much less than the full amount.
The debt still lies with my son and Amigo loans.scoey1001 said:
Someone else might be able to tell you whether the defaults would be registered against your son or the other person at present.
As I understand it (open to correction) if my son does n't make any payments, both he AND the loanee will have defaults registered against their names.If my son (us, his parents) pay off the debt, there will be no default against his name OR that of the loanee . . . which leaves the loanee clear to try and find some other sucker to act as guarantor for him.
If nothing has been paid since March then he probably already has a default, i might be wrong but i don't think this will be wiped even if paid in full.
Also the debt will be statute barred in Scotland in 5 years. I'd let your son learn a lesson and not pay it for him.
Also if he has a default anyway, then just let it go to a debt collector (who will have bought it for about 10% of the value) and then negotiate if you are set on paying. I'd probably post this on a debt specialist forum to find out where you stand.
Also the debt will be statute barred in Scotland in 5 years. I'd let your son learn a lesson and not pay it for him.
Also if he has a default anyway, then just let it go to a debt collector (who will have bought it for about 10% of the value) and then negotiate if you are set on paying. I'd probably post this on a debt specialist forum to find out where you stand.
I’d be chasing the defaulter up at his parents address with lawyers letters and the like, in the hope that his parents are as inclined to bail their son out as you are. But ultimately, you’re on a hiding to not very much.
What (vaguely) is the address in Edinburgh? Is it skint council estate, or £4,000 in the change jar territory? I or someone else local might be able to advise.
What (vaguely) is the address in Edinburgh? Is it skint council estate, or £4,000 in the change jar territory? I or someone else local might be able to advise.
First thing i would want to do (as a lawyer) is see a copy of the original debt instrument and the 'guarantee' - have you done that? If the guarantee is somehow to be governed by English law, then there are formalities to observe that, if not met, could result in the guarantee being unenforceable.
My initial response would be for your son to write to Amigo saying that he was only 20 (or whatever age he was) when he signed the guarantee, and didn't understand what he was letting himself in for. He should say that he should have been advised to obtain independent advice before entering into the guarantee, but wasn't, and that the guarantee is therefore unenforceable.
He should also lodge a formal complaint and say that he will refer the matter to the Financial Ombudsman if they fail to resolve his complaint satisfactorily.
It's always a good idea to put in a Subject Access Request for a release of all the data they hold on him. It only costs £10, but may disclose some useful information. Even if it doesn't, it shows he knows the law and is likely to cause them problems.
It would also do no harm to tell them that he's a student, with no income and no assets, and that if they try to enforce the loan against him he will consider making himself bankrupt, as he's nothing to lose by doing so except his debts.
Most of this is basically bluffing, but the object is to let them see that they are very unlikely to get paid easily, if at all.
And then finish the letter by making an offer to pay, say, £500 in full and final settlement of all claims against him. The offer must be made `without prejudice', so it can't be used as evidence against him.
So far as claiming reimbursement from the `friend' it's easily done through Money Claim, but you can only sue him once you know how much you've had to pay to get rid of the toxic Amigo lot. And if he's also a student or on low wages the chances of recovering anything are pretty slim, at least for the time being.
I can't see why you shouldn't sue in England, bearing in mind that both your son and his `friend' are resident within the England and Wales jurisdiction.
He should also lodge a formal complaint and say that he will refer the matter to the Financial Ombudsman if they fail to resolve his complaint satisfactorily.
It's always a good idea to put in a Subject Access Request for a release of all the data they hold on him. It only costs £10, but may disclose some useful information. Even if it doesn't, it shows he knows the law and is likely to cause them problems.
It would also do no harm to tell them that he's a student, with no income and no assets, and that if they try to enforce the loan against him he will consider making himself bankrupt, as he's nothing to lose by doing so except his debts.
Most of this is basically bluffing, but the object is to let them see that they are very unlikely to get paid easily, if at all.
And then finish the letter by making an offer to pay, say, £500 in full and final settlement of all claims against him. The offer must be made `without prejudice', so it can't be used as evidence against him.
So far as claiming reimbursement from the `friend' it's easily done through Money Claim, but you can only sue him once you know how much you've had to pay to get rid of the toxic Amigo lot. And if he's also a student or on low wages the chances of recovering anything are pretty slim, at least for the time being.
I can't see why you shouldn't sue in England, bearing in mind that both your son and his `friend' are resident within the England and Wales jurisdiction.
Pro Bono said:
*snip*
It's always a good idea to put in a Subject Access Request for a release of all the data they hold on him. It only costs £10, but may disclose some useful information. Even if it doesn't, it shows he knows the law and is likely to cause them problems.
I thought with GDPR that the SAR fee was abolished?It's always a good idea to put in a Subject Access Request for a release of all the data they hold on him. It only costs £10, but may disclose some useful information. Even if it doesn't, it shows he knows the law and is likely to cause them problems.
Anyway, I know of a very similar situation involving Amigo loans. The equivalent of the OP paid off the loan and went through the petty debts process after the original borrower. All went well in court, the borrower had a pretty poor defence that the judge saw through and found against them. It did cost a few hundred in fees but the borrower has since made a few payments back and have the judgement against them so a moral victory, even if it will take 15 odd years for the amount to be repaid.
scoey1001 said:
Has the debt been sold on to a debt collector yet? I say this as if it has there is a strong chance you will be able to settle for much less than the full amount. However not sure if this would have an affect on your sons credit. Someone else might be able to tell you whether the defaults would be registered against your son or the other person at present.
It would be against the son, and be on his file for six years.It would be enough to rule out many job sin finance for many years to come.
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