A reader asked:
I agreed to be the guarantor for a loan for a friend, but he lied to me and couldn’t pay it. Amigo were very difficult, wanting me to stop paying other debts so I could pay them, and got a CCJ. Is it too late for me to complain and ask to be removed as the guarantor?
Guarantor lenders have a reputation for being very fast to go to court when a guarantor doesn’t pay them. People who have never had serious debt problems can end up with a County Court Judgment (CCJ) which makes it very hard to get any other credit, to remortgage or to get a new tenancy.
How to complain after a CCJ when you are the guarantor
You can still complain if you think you should never have been accepted as a guarantor, even after you have had a CCJ.
There are several reasons to complain. The lender didn’t check that the borrower could afford the loan, the lender never explained the loan properly to you, you were pressured into agreeing to the loans or the lender didn’t check that you could afford the loan repayments and still pay all your other expenses, bills and debts.
Read How to complain when you are the guarantor for a loan which looks at these reasons and has a template letter you can use. In a complaint, always make all points that are relevant to your case as they may all help!
The template says:
I am asking you to remove me as guarantor for this loan and for it to be deleted from my credit record.
When you already have a CCJ, change that to say:
I am asking you to remove me as guarantor for this loan, to refund all the payments I have made, to set aside the CCJ that you have and to delete the loan from my credit record.
Here “set aside” is the legal phrase for cancelling a CCJ. The lender can apply to the court for this and then the CCJ will go from your credit record.
Will this work?
The lender may agree to do all this without it having to go to the Financial Ombudsman (FOS). A debt adviser told me a few days ago that one of his clients complained and Amigo said it would remove him as the guarantor, refund what he had paid and get rid of the CCJ.
But if the lender says No, send your complaint to the Financial Ombudsman.
FOS will not always look at a complaint if there is a CCJ. But they usually will if they think you have reasons to complain that were not considered by the court.
Many CCJ’s are given as default judgments – you never put in a defence, so the lender was just awarded the decision without the court considering the case at all. Or you may have tried to defend the case but not focussed properly on the affordability aspect.
In either of these situations, I would expect that FOS would look at your complaint. And FOS is agreeing with the customer in a very large proportion of guarantor loan complaints!
(1) there is a current court case
When you are getting threatening letters about court, the lender should not go to court when there is a complaint underway, including one at the Financial Ombudsman. So send them a complaint immediately, copying it to any solicitors involved as well as the lender’s normal complaint email.
If it has already gone to the next stage and the lender has started legal action, put in a complaint to the lender, copied to their solicitors, immediately and include the sentence:
I would like you to stay the current court case and for this matter to be decided by reference to the Finacial Ombudsman.
Here “stay” is the legal term for putting a case on hold.
It is going to be much simpler for you to make your case to the Financial Ombudsman than in court, so this is a better idea than just trying to defend the court case.
But importantly you also need to put in a defence to the case if you have received a Claim Form, even if you are asking for the case to be stayed. In this situation, you probably need some advice and support, so two places for help:
- your local Citizens Advice – they will be able to get assistance from the national specialist debt experts. It may take a few days to get to see someone at your local CAB, so send in the complaint immediately with that extra sentence.
- National Debtline on 0808 808 4000.
(2) there is a charging order
If you have a house with equity, some lenders will go to court for a Charging Order over your house after they have got a CCJ.
If the CCJ is removed, the Charging Order should also be removed. You can make it clear you want this to happen by changing the line in your complaint to say:
I am asking you to remove me as guarantor for this loan, to refund all the payments I have made, to set aside the CCJ that you have, to delete the Charging Order and to delete the loan from my credit record.
(3) you are the borrower
Some guarantor lenders go to court for a CCJ against the borrower at the same time they sue the guarantor, so you both get CCJs.
The borrower can also make an affordability complaint and ask for the CCJ to be deleted. The complaint template for borrowers is here: How borrowers can complain about a guarantor loan. Change the sentence which says:
I am asking you to remove the interest from the balance so I only have to repay what I borrowed and to allow me to reduce my monthly payments to an affordable amount.
I am asking you to remove the interest from the balance so I only have to repay what I borrowed, to set aside the CCJ, and to allow me to reduce my monthly payments to an affordable amount.
Here winning your complaint doesn’t get rid of the loan, just the CCJ and the interest, so you may still owe some money.