Loan paid to wrong person but lender still chasing Read more at: Loan paid to wrong

[jumbo100]

This is an interesting one. A good friend of mine agreed to guarantee a loan for a friend of theirs. The monthly payments, apart from the odd one or two, have not been made so the lender is asking the guarantor for the money, not surprisingly. So, I though I would try and help my friend out as she has been 'dropped in it' by their friend. My friend's friend has turned out to be totally untrustworthy but has agreed to co-operate with me in trying to sort this one out.

On looking at the loan it was originally for £1500. £500 fees were added and then interest which brought the total amount up to a whopping £2895. Loan sharks or what?

Anyway, it transpires that the money was paid into the guarantor's a/c not the borrowers a/c. The guarantor (my friend) did then give the £1500 advance to the borrower.

In trying to help my friend I have these questions that I hope someone can answer definitively.

1. Since the money was not paid into the borrowers a/c, legally they have not had the money from the lender therefore does the loan actually exist. If this is the case then it begs the question is the loan valid at all (I know the lender would then have to chase the guarantor as they had the money in error but that's another issue).

2. Would they be best sending an 'I know nothing of this debt' letter( bear in mind that one or two payments have been made by the borrower which may constitute admitting the borrowing) or CCA request for a valid agreement?

Thanks in advance.

Jumbo

Read more at: Loan paid to wrong person but lender still chasing - Legal Beagles Consumer Forum

[Guest]

Re: Loan paid to wrong person but lender still chasing Read more at: Loan paid to wr

Hi

I have seen one or two of these agreements . I am not saying that it is the case with your friend, but it turned out that if you examine the agreement the perosn who thinks he is the guarantor is actualy the debtor.

The person who thinks he is the debtor is mearly given the task of repaying the installments

Peter

[TUTTSI]

Re: Loan paid to wrong person but lender still chasing Read more at: Loan paid to wr

Can I suggest Jumbo that you post up the agreement without any personal details so that others more experienced can can advise you.

I would agree 100% with you sentiments as we discussed last night but best we see the actual wording of the document?

This is an interesting one. A good friend of mine agreed to guarantee a loan for a friend of theirs. The monthly payments, apart from the odd one or two, have not been made so the lender is asking the guarantor for the money, not surprisingly. So, I though I would try and help my friend out as she has been 'dropped in it' by their friend. My friend's friend has turned out to be totally untrustworthy but has agreed to co-operate with me in trying to sort this one out.

On looking at the loan it was originally for £1500. £500 fees were added and then interest which brought the total amount up to a whopping £2895. Loan sharks or what?

Anyway, it transpires that the money was paid into the guarantor's a/c not the borrowers a/c. The guarantor (my friend) did then give the £1500 advance to the borrower.

In trying to help my friend I have these questions that I hope someone can answer definitively.

1. Since the money was not paid into the borrowers a/c, legally they have not had the money from the lender therefore does the loan actually exist. If this is the case then it begs the question is the loan valid at all (I know the lender would then have to chase the guarantor as they had the money in error but that's another issue).

2. Would they be best sending an 'I know nothing of this debt' letter( bear in mind that one or two payments have been made by the borrower which may constitute admitting the borrowing) or CCA request for a valid agreement?

Thanks in advance.

Jumbo

Read more at: Loan paid to wrong person but lender still chasing - Legal Beagles Consumer Forum

[jumbo100]

Re: Loan paid to wrong person but lender still chasing Read more at: Loan paid to wr

I haven't got a copy of the agreement yet. The guarantor is not the borrower in this case. I don't quite see how an agreement along the line of what you're suggesting could be enforceable, unless I'm missing something.

[teaboy2]

Re: Loan paid to wrong person but lender still chasing Read more at: Loan paid to wr

Ohhh trust me it can be enforceable, but it all depends on the wording of the agreement itself. The guarantor is legally the debtor, the borrowers liability is to meet the repayments. Your friend could sue the borrow for breaching their part of the contract to recover any sums that your friend had to pay back to the creditor, but as far as the creditor is concerned the gaurantor is the debtor in the legal sense as they gauranteed the debt and therefore agreed to act as security e.g. repay the debt should the borrow not default on payments. Unfortunately your friend is liable for the borrowers debt as a result of the borrowers breach/default on repayments.

[Guest]

Re: Loan paid to wrong person but lender still chasing Read more at: Loan paid to wr

I haven't got a copy of the agreement yet. The guarantor is not the borrower in this case. I don't quite see how an agreement along the line of what you're suggesting could be enforceable, unless I'm missing something.

Why would it not be enforceable?

There is nothing stopping me takeing a loan out and giving the money to whoever i like.

It entirely depends on the way the agremnt is drafted.
A clue is provided by the stipulation that the credit must be paid into the guarantors account.

Peter

[jumbo100]

Re: Loan paid to wrong person but lender still chasing Read more at: Loan paid to wr

I'll know more when I see the agreement. If it states that the monies are to be paid into the Guarantor's a/c then that would make sense in terms of enforceability.

[Guest]

Re: Loan paid to wrong person but lender still chasing Read more at: Loan paid to wr

Yes

Also the way that defaults are treated.

The agrements i have seen have a clause that will allow them to draw on the "guarantors" account as soon as a payment is missed.

If they signatory was a genuinge gurantor the account would have to have been defaulted and the debtor pursued before any claim could be made against them.

Pete

[jumbo100]

Re: Loan paid to wrong person but lender still chasing Read more at: Loan paid to wr

Thanks Peter.

I've discovered that the loan Co add £144 every time the borrower defaults. This is on a monthly payment of £113......

I do believe that they chase the borrower first. On the Guarantor/indemnity form it says
'relating to a regulated cca'.

The wording also says

'I, the Indemnifier request you the Creditor to enter into the agreement briefly described below ("the agreement") with the Debtor'

Does this give any clues to the type of agreement?

[Guest]

Re: Loan paid to wrong person but lender still chasing Read more at: Loan paid to wr

Thanks Peter.

I've discovered that the loan Co add £144 every time the borrower defaults. This is on a monthly payment of £113......

I do believe that they chase the borrower first. On the Guarantor/indemnity form it says
'relating to a regulated cca'.

The wording also says

'I, the Indemnifier request you the Creditor to enter into the agreement briefly described below ("the agreement") with the Debtor'

Does this give any clues to the type of agreement?

Now i am confused.

I think it would be best to see the agreement before further speculation

Peter

[jumbo100]

Re: Loan paid to wrong person but lender still chasing Read more at: Loan paid to wr

Will probably take me a few days so watch this space.

[righty]

Re: Loan paid to wrong person but lender still chasing Read more at: Loan paid to wr

OMG £144 penalty I suggest that is an unfair contract & may be challenged