Clear The Name From Crib Being Guarantor

[Uthum]

Assume that person X has signed for a vehicle lease as a guarantor on behalf of person Y. Mr. Y fail to pay installments neatly then the vehicle is taken back by the leasing company and they do re-sale it. Any outstanding or differece of financial settlement should be paid by Mr. Y. Mr. Y also fails to settle such financial outstanding.

In such case,

1. What accountability that guarantor has?.

2. If the financial institution block the guarantor's name in the CRIB how he/her can clear his/her name?

Advise is expected from experience people on this regards.

[Tuff Don]

Assume that person X has signed for a vehicle lease as a guarantor on behalf of person Y. Mr. Y fail to pay installments neatly then the vehicle is taken back by the leasing company and they do re-sale it. Any outstanding or differece of financial settlement should be paid by Mr. Y. Mr. Y also fails to settle such financial outstanding.

In such case,

1. What accountability that guarantor has?.

2. If the financial institution block the guarantor's name in the CRIB how he/her can clear his/her name?

Advise is expected from experience people on this regards.

1.Gurantor has to pay the total oustanding.Payment terms can be negotiate with the company.If not they will resort legal action against the borrower and the guarantors.Courts will first hear the boorower.If he fails to apear or bankrupts garantors has to pay the balance.Long procedere.If there are sevaral gurantors libility has to be shares amoung them.

2.Only option is settle the total oustanding.Or else it will appear in red colour with days until u settle the facility in full.

So best iption is try to get rid of the situ.In future when singhning as a gurantor evaluate ur buddys finacial position.

[Tikiri]

Also, even if it is settled it will still appear on a CRIB report

of the status - like if it was settled as a part of the legal effort it will show as 'legal"

if you negotiate for a lesser sum and say the Financial Institution wrote off a part

it will also show the "written off amounts' - both doesn't reflect well on the Borrower and the guarantor.

Generally all outstanding matters of the past 24 months are shown more focussed

and the rest as historical data.

Having settled any amounts like that pls do not forget to get a letter from teh

Financial Institution that the matter has now "Fully Settled"

this is only for your future reference of another facility of the future Insitution querries.

Good Luck

[VVTi]

After being in a situation just like the one indicated, I have now decided NOT To sign as a guarantor. No need to lose a freind, your credit worthiness and your hard earned savings/earnings.

Luckily in my case the borrower bailed us both out in time.

[Uthum]

Thank TurfDon, Tikiri and VVTi. Your valuabel adivise is appreciated.

As VVTi said "DO NOT SIGN AS A GUARANTOR FOR ANYBODY". Ask your friends and relatives to not to do so.

1. Additionally, it was found that the Central Bank may have identified this financial institution as an illeagal (or problematic like GoldenKey)company , which seems to be no longer available or name may have been changed. Earlier the name of that institution was "Industrial Financial Ltd". If the situ is like that there is no way to settle any outstanding, isn't it?

2. What if borrower did not attend for any court case

3. Also guarantor didn't receive any notification from the court, then how to follow up?

4. In reallity how can guarantor force the borrower to settle the outstanding if he/her has enough money?

5. Can gaurantor take leagal action against borrower being fail to settle said case?

Hope this discussion will convey good massage to others to avoid singing as gaurantees.

[VVTi]

2. What if borrower did not attend for any court case

3. Also guarantor didn't receive any notification from the court, then how to follow up?

4. In reallity how can guarantor force the borrower to settle the outstanding if he/her has enough money?

5. Can gaurantor take leagal action against borrower being fail to settle said case?

Hope this discussion will convey good massage to others to avoid singing as gaurantees.

None of these questions are valid. Once you sign as a guarantor you are legally liable as much as the borrower. What happens between you and the borrower is not the problem of the courts or the lending institution. You can kill each other, sue each other, threaten each other, set each others houses on fire, shag each other for all they care. But the lending institution lawyers runs the show an they will get their money, one way or the other.

Avoid the hassle, say no to being a guarantor.

[carboy2011]

Machan I was in a similar situation one of my colleagues asked me to sign as a gurantor sayign he needs money fo his sisters wedding which i agreed and signed (loan was for 450/- it was few years back)

i did all that in good faith but what did that guy do? he had asked many of his firends to sign as gurantors and got loans from various banks and fled the country but thank God the loan I signed was not approved hence by Gods grace i was saved if not I would have had to pay the whole damm thing!

I learnt a bitter lesson,dont sign as gurantors as people tend to bite the hand that fed them!

After being in a situation just like the one indicated, I have now decided NOT To sign as a guarantor. No need to lose a freind, your credit worthiness and your hard earned savings/earnings.

Luckily in my case the borrower bailed us both out in time.

[Sylvi]

Members,

I have my name on the CRIB. I was not aware of this I wanted a facility from the bank, then they informed me that my name is on the CRIB, to find I signed as a guarantor, for a friend to lease a vehicle, he had failed to pay few installments. Finally I settled those three installments and got a letter from the finance company that they have no claims from that party. But I was told that my name will remain there for three years.

Sylvi Wijesinghe.

[Reckless]

Members,

I have my name on the CRIB. I was not aware of this I wanted a facility from the bank, then they informed me that my name is on the CRIB, to find I signed as a guarantor, for a friend to lease a vehicle, he had failed to pay few installments. Finally I settled those three installments and got a letter from the finance company that they have no claims from that party. But I was told that my name will remain there for three years.

Sylvi Wijesinghe.

If the borrower didn't pay installments wont the guarantors get a warning letter from the bank?

[harshansenadhir]

If the borrower didn't pay installments wont the guarantors get a warning letter from the bank?

reminder letters and subsequent communication from the institution send to the guarantor/guarantors as well.

Edited October 3, 2011 by harshansenadhir

[fatjoe]

None of these questions are valid. Once you sign as a guarantor you are legally liable as much as the borrower.

VVTI is absolutely right. Guarantor means u guarantee that, in case of borrower failing to settle (reason immaterial) guarantor will settle the liability

[fatjoe]

If the borrower didn't pay installments wont the guarantors get a warning letter from the bank?

Strange if it is not the case

[Sylvi]

Members,

Yes, I got registered letters,then I used to Telephone the friend he says he will pay, this was going on from the third month after getting the lease. He always delay three months and pay two installments, then that comes down to one. He went on for two years like above. Then when I applied for a facility only I came to know that my name is on the CRIB. I settled all three installments got the letter from the finance company to say that my friends lease installments are in order at present.Still few months to go I did not get my money and he do not communicate with me but whenever I get installment reminder letters I call him about outstanding installments, he do not answer the phone his wife comes on the line, as he has call ID.

Once I contacted him from a different line then he came on the line he says he will settle every thing including mine as early as possible. By signing as a guarantor I have lost a friend. This is most Srilankans attitude try to play with others money.

Sylvi Wijesinghe.

Edited October 4, 2011 by Sylvi

[Reckless]

Members,

Yes, I got registered letters,then I used to Telephone the friend he says he will pay, this was going on from the third month after getting the lease. He always delay three months and pay two installments, then that comes down to one. He went on for two years like above. Then when I applied for a facility only I came to know that my name is on the CRIB. I settled all three installments got the letter from the finance company to say that my friends lease installments are in order at present.Still few months to go I did not get my money and he do not communicate with me but whenever I get installment reminder letters I call him about outstanding installments, he do not answer the phone his wife comes on the line, as he has call ID.

Once I contacted him from a different line then he came on the line he says he will settle every thing including mine as early as possible. By signing as a guarantor I have lost a friend. This is most Srilankans attitude try to play with others money.

Sylvi Wijesinghe.

That sucks man. I my self has signed as a guarantor and I've also got a letter from the bank saying about a over due, but there has been a mishap with a fund transfer from a borrowers account, so he sorted it out or at least I think he sorted it, didn't get any more letters but still have another 2 years to go.. Like the other members said its best to avoid signing as a guarantor.

Edited October 4, 2011 by Reckless

[Tikiri]

All Financial Institutions have to report thrice a month of all updates,

so even if the borrower has paid late few days the report

shows such delays and the no of days for each month for teh past 24 months.

By the way the CRIB is in the process of updating the information feilds and the

reporting format, even the Photo of the person is likely to be incorporated,

One must also note that CRIB report though we asssociate with a negative conatation it

has a positive side too , when you want to apply for a facility,

if all your loan, Credit Card repayment are timely the institution looks at it favorably.

[miniace]

Good info found here...Thanks guys!

MINIACE

[ae100]

Assume that person X has signed for a vehicle lease as a guarantor on behalf of person Y. Mr. Y fail to pay installments neatly then the vehicle is taken back by the leasing company and they do re-sale it. Any outstanding or differece of financial settlement should be paid by Mr. Y. Mr. Y also fails to settle such financial outstanding.

In such case,

1. What accountability that guarantor has?.

2. If the financial institution block the guarantor's name in the CRIB how he/her can clear his/her name?

Advise is expected from experience people on this regards.

Well, the leasing company only provides the lessee about 60% - 75% of the value of the vehicle isn't it? So that means they should be able to recover the amount by selling the vehicle right? (of course they'll have to go through the hassle of spotting the vehicle, seizing it etc.)

So why should the guarantor be liable financially? I understand the finance company would still report the lessee and the guarantors to the CRIB, but why should the guarantors pay the money?

I understand that a clear title would be valuable than money, but everything has a price.

[Sylvi]

That sucks man. I my self has signed as a guarantor and I've also got a letter from the bank saying about a over due, but there has been a mishap with a fund transfer from a borrowers account, so he sorted it out or at least I think he sorted it, didn't get any more letters but still have another 2 years to go.. Like the other members said its best to avoid signing as a guarantor.

'Reckless',

I agree with you, best to avoid signing as a guarantor.

This friend is a child hood friend, we two family's had traveled round srilanka and holidays abroad too. so cannot refuse. He is a person with leading export company director with good income I have signed once early to him few years ago. Now with my age 68+ most financial institutes do not give me loans. lending instution will not accept me as a guarantor.Because he had settled early Vehicle lease before time and I was the guarantor for that lease too they accepted me as the guarantor for the new vehicle lease.

Even my bank will not give me any facility due to my age, facility's are only given to my daughter I had to sign as a guarantor I have a joint account myself my wife and daughter, any three of us can sign for withdrawals, only one signature is necessary. So that if I die even they can carry on with that account, all my income returns get deposited to that Account.

My name will be there for three years on the CRIB.

Sylvi Wijesinghe.

[jdnet]

So why should the guarantor be liable financially? I understand the finance company would still report the lessee and the guarantors to the CRIB, but why should the guarantors pay the money?

are you seriously asking why a GUARANTOR would be liable?

Let me ask you this; Why does the finance company require a guarantor when you try to take a lease out?

[ae100]

are you seriously asking why a GUARANTOR would be liable?

Let me ask you this; Why does the finance company require a guarantor when you try to take a lease out?

That's exactly my question mate..! The finance company owns the asset (the vehicle, of which they become the 'absolute' owner) and the money they pay is always less than the value of the vehicle, which itself guarantees that they will be able to recover the value in case a lessee defaults payment.

The role of a guarantor should ideally be a trustworthy person who 'guarantees that the lessee would pay'. Not that the guarantor would pay.

I know my post won't change the way finance companies operate, and it's not a perfect world where everybody likes to pay their debts on time, but if you really think about it, a guarantor is not needed when a vehicle is leased. But what happens in the real world is that the finance companies lower their financial risk to almost zero by making the guarantor too liable financially.

[VVTi]

That's exactly my question mate..! The finance company owns the asset (the vehicle, of which they become the 'absolute' owner) and the money they pay is always less than the value of the vehicle, which itself guarantees that they will be able to recover the value in case a lessee defaults payment.

The role of a guarantor should ideally be a trustworthy person who 'guarantees that the lessee would pay'. Not that the guarantor would pay.

I know my post won't change the way finance companies operate, and it's not a perfect world where everybody likes to pay their debts on time, but if you really think about it, a guarantor is not needed when a vehicle is leased. But what happens in the real world is that the finance companies lower their financial risk to almost zero by making the guarantor too liable financially.

A bit naive there aren't we?

Finance companies are in it for the profits. The value of the car, how much of a percentage you took against it is not the issue. The borrower and the guarantor entered into an agreement with the finance company to repay, capital plus interest p,us any other costs incurred in the period allocated. Anything else is a breach of contract.

In case you have not got in to a leasing/finance agreement, there is a line that says the in case of default the company will sell the car at the forced sale value and the balance is the liability of the borrower. When the borrower is liable, so is the guarantor. The guarantor is not there to drag a wailing and kicking non-paying borrower to the finance company and make him pay, he is there to take the responsibility to pay in case the borrower doesn't.

The forced sale scenario is what happened to me.

Edited October 4, 2011 by VVTi

[ae100]

A bit naive there aren't we?

Finance companies are in it for the profits. The value of the car, how much of a percentage you took against it is not the issue. The borrower and the guarantor entered into an agreement with the finance company to repay, capital plus interest p,us any other costs incurred in the period allocated. Anything else is a breach of contract.

In case you have not got in to a leasing/finance agreement, there is a line that says the in case of default the company will sell the car at the forced sale value and the balance is the liability of the borrower. When the borrower is liable, so is the guarantor. The guarantor is not there to drag a wailing and kicking non-paying borrower to the finance company and make him pay, he is there to take the responsibility to pay in case the borrower doesn't.

The forced sale scenario is what happened to me.

Naive alright mate. We all find it difficult to understand certain things of this world. :-) for me it's leasing.

I agree that the current operating model of vehicle leasing in SL goes like what you've explained. And yes, you are bound by whatever the rules the agreement says.

But (in a hypothetical, but a practical scenario) don't you think that the finance companies can take a bit more risk by calling the guarantor thing off? This way, more people will be able take leases, and there won't be third parties (guarantors) liable for lease agreements.

What's the 'forced sale' scenario? is it that the finance company force you to sell the vehicle and settle the lease, or do they seize the vehicle and sell it? I believe you are better off selling it on your own.

[VVTi]

A forced sale scenario comes only if they seize it. It is when they sell it to best price they can get at the shortest time. Auctions, bulk sales, etc etc. That's why sometimes Leasing company yard sales yields really cheap cars, they sell cars as soon as they can to recover part of their investments.

I had a situation where I was out of a job 3 years in to a 4 year lease and found it difficult to make the payments. Explained to SFC and they gave me a 3 month grace period, I sold the car during the time and settled in full, and they gave me a kick ass rebate that I was not even expecting. But trill then I was on time with my payments and I sent quite a few business deals their way so I was in their good books.

About finance companies following an ideal path and taking a slight' risk, that's wishful thinking. Imagine yourself in their shoes, why would you want to take a risk on behalf of a customer who walk off the street?I know that for good regular or corporate customers they do that.

People who wants to buy a car will come to them either way. There is the option of some companies like banks not requiring guarantors, but the legal liability for the borrower still stands and more so.

[Ripper]

interesting.

i think as more and more banks are offering "car loans" and the likes...leasing companies overtime might have to scrap the whole guarantor thing.

These days there are quite a few leasing companies competing business and all of them try to, and absolutely have to offer a competitive product.

They say lesser rates, quicker processing etc etc

Throw banks into that mix, competition amongst the companies will only get tougher. And hopefully that's a huge benefit customers.

A different pov is that what brought down the global financial markets with the real estate bubble in the US.

If you lend to people who can't keep up with the payments, you'll end up with loads of cars but no cash in the country. Not a good idea.

So maybe the guarantor thing is a good deterrant.

Just thinking out loud. me no nothing about finance stuff

[YALA]

best thing you can do is to do within your means...rather than trying to borrow to get something you want...if you do really have to borrow..borrow against your investments or based on ur salary using those professional loans or loans based on your qualifications...same way vice versa if someone wants you to be there guarantor ask them to utilize one of the options where they dont have to rely on some one else...as a policy ill never sign as an guarantor on behalf of anyone nor would i expect someone to be for me in return...