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Post by bracknellboy on Jun 7, 2014 14:58:25 GMT
Variation on chasing the borrower is of course to chase the guarantor.
I have a particular loan where one of the guarantor's sadly passed away. Back end of april we had:
"There are xxx guarantors on this loan. One of the guarantors passed away, which is why the business was liquidated...."
We have recently had:
"Our external legal team is still actively pursuing the guarantor who is not assisting us....there is no further update"
Call me morbid, but knowing FC is it just possible they are pursuing the wrong guarantor ?
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Post by yorkshireman on Jun 8, 2014 21:05:07 GMT
Variation on chasing the borrower is of course to chase the guarantor. I have a particular loan where one of the guarantor's sadly passed away. Back end of april we had: "There are xxx guarantors on this loan. One of the guarantors passed away, which is why the business was liquidated...." We have recently had: "Our external legal team is still actively pursuing the guarantor who is not assisting us....there is no further update" Call me morbid, but knowing FC is it just possible they are pursuing the wrong guarantor ? You’re not being morbid at all, I believe that FC are so slipshod that they could well chase the wrong guarantor.
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Post by captainconfident on Jun 8, 2014 23:55:52 GMT
Yet another zombie loan.
Edit
Having posted that I now feel thoroughly ashamed of myself.
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Post by businessbuddy on Jun 9, 2014 13:40:02 GMT
Although a sad state of affairs, the fact that one of the guarantors has passed away should not prevent FC from recovering the outstanding debt. I take it that FC becomes a creditor to the estate like all other outstanding debts due to the estate.
It appears that with 2 guarantors, presumably agreement was made such that each was responsible for at least half unless that could not be recovered then the remaining guarantor could be pursued for the remaining balance due.
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Post by batchoy on Jun 9, 2014 14:47:46 GMT
As I understand it the thing with 'Guarantee Debts' is that it all depends on the state of the loan when the guarantor died. My understanding and I am open to correction is that if the loan was still being serviced by the borrower when the guarantor died the guarantee died with them, but if the loan had defaulted and thus the guarantee was being called in when the guarantor died the debt passes to the guarantor's estate. What I do know is that 'Guarantee Debts' are treated as gifts and thus are subject to the IHT 7 year and annual allowance rules for IHT.
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blender
Member of DD Central
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Post by blender on Jun 9, 2014 14:52:57 GMT
I hope that all guarantors are jointly and severally liable. I would expect that lenders through FCRL should have a claim on the estate of a deceased guarantor - but it is a good question to ask. It would not be fair on the remaining guarantor to take on the whole liability irrespective of the value of the estate.
Edit: but I agree with Batchboy on the timing/contingency issue. If the death 'caused' the liquidation then there was no personal debt at that time, and the other guarantor would be responsible for all of it.
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