Is this "Obtaining by deception"

[spammylou]

Firstly hello to you all again, I haven't been on here for a long time now.

Basically, my partner stood guarantor on a loan to a "friend" he has known for 20 years. She told him the loan was to help them purchase their council house. The loan was paid out to my partner who gave her all the money. The payments they were supposed to make were not, and no attempt was made to pay. It now turns out, that she & her husband owe many people (his family that live in her street included) and according to some of them, she has told them that my partner is her brother (NOT TRUE), and that he owes her �10,000!! (ALSO NOT TRUE) so that on this basis they will lend her money until she gets back what is owed to her!!

My partner is now liable for ALL of this loan and judging from what we have heard she & her husband are stitching people up for money. We have no idea what has been done with the money, but we understand from the loan company that they have now tried to consolidate this new borrowing along with old debts they have already accumulated.

Please, before anyone says anything about being silly for standing guarantor, she was a close friend to him for many years, and although I certainly was not keen on the idea, we now have to find a way forward with this and I feel she should be investigated by the Old Bill for O by D. It is either this or a Creditors Petition for Bankruptcy. Any help gratefully received. xxxx

[Ethel]

It is unusual for the guarantor to get the money to give to the lender.

What have you got in writing?

[Ethel]

Of course, I meant it is unusual for the guarantor to receive the money from the lender to give to the borrower.

[Buenchico]

(2-part post):

I promise not to make any comments about your partner 'being silly, etc', but you still won't like my answer because I can't see any clear way forward:

Firstly, you mention a creditor's petition for bankruptcy. My understanding of the legal relationship between a guarantor and a person taking out a loan is that no debt can exist between them, in relation to the loan. i.e. legally (rather than morally), your partner could pay off the entire loan and the woman who took it out wouldn't owe him a single penny. (Acting as a guarantor creates a 'joint and several liability' for the repayment of the loan. The fact that only one person within the 'legal partnership' contributes to the repayments doesn't mean that the other partner owes them anything).

So, as I see it, there's no way that your partner could petition for the woman's bankruptcy because (legally) she doesn't owe him a penny.

The loan company wouldn't be interested in petitioning for bankruptcy because their only interest is in getting their money back (and they're happy to pursue the guarantor for that). Additionally, they wouldn't be able to present such a petition until they'd obtained a county court judgement and the debtor had defaulted on the agreed repayments. (From their point of view, it's a great deal easier to chase your partner for the money).

[Buenchico]

While the woman has clearly used deception to get the loan, it would be hard to prove a charge of 'obtaining a money transfer by deception, contrary to the provisions of Section 15A of the Theft Act 1968, as amended by Section 1 of the Theft (Amendment) Act 1996' (which is the long-winded phrase which you'd clearly like to hear read out in a court of law).

'PC Plod' would need to be convinced that the information presented on the loan application form was fraudulent before being able to take the matter further. (The fact that the loan required a guarantor suggests that the woman was reasonably truthful in declaring the state of her financial affairs). Even if it could be proved that the woman lied to your partner (which would be difficult because it's his word against hers), it might still be difficult to launch a successful prosecution if the information provided to the lender was accurate. (If it wasn't, there's even a risk that your partner could be prosecuted, for aiding the offence, by agreeing to act as guarantor).

I'm sorry that this post seems so negative; I'm only trying to warn you that it might be very difficult to take action against this woman. I hope that others might be able to offer more constructive advice.

Chris

[Yorkie580]

Try phoning your local police CID office for advice. The deception offences have almost all been replaced in the last couple of months by the new Fraud Act that came into force at the beginning of the year.

The new act seeks to simplify the existing legislation and close up the loop holes and the test is now one of fraudulent intent rather than proving the victim was deceived. For example, previously if someone put a fakle caoin into amachine to get a drink, it would be theft rather than deception because the machine has no mind of its own to be deceived. However under the new legislation it would be a fraud offence because of the fraudluent intent.

From the brief circumstances you've described, it may well fall under section 2 of the act - fraud by false representation - but it would depend upon the agreement at the time and also when the loan was taken out.

[themas]

I agree with Chris - there is no point in trying to make her bankrupt. Even if his view of this aspect is wrong (& I don't have enough knowledge about that), she almost certainly has no worthwhile assets or income, so you wouldn't get your money back from her anyway.

It's very drastic & there may well be good reasons against it, but your partner could get rid of his own responsibility if he made himself bankrupt. There are lots of downside to this & whether it might be worth considering depends on his overall financial circumstances, whether you own a house etc.

[Law Man1856]

Spammylou,

Loaning money to a third party is very dangerous, dispite the strength of friendship or indeed family.

If your partner stood guaranter then he will be liable to repay if they default.

This is a civil matter and criminal intent would need to be proven if you involve the police.

The investigation can be very longwinded and the outcome unsure if they have no money anyway what will the court order them to pay?

A difficult decision but maybe contact the CAB who will advise you for no cost.

You can contact a solicitor but you will have to pay.

BEST OF LUCK

[spammylou]

Thank you chaps for all your help.
Firstly, I asked a copper (who is high up in the force) for his advice (as a hairdresser I meet alsorts!) basically he said it is difficult to prove, which I have to agree is probably true.
Secondly, we wanted to petition her for bankrupcy because we knew she owed others money, and this was not to get our money back as we knew it fruitless, but just to make life so difficult for her as she has now for us (tit for tat)
Thirdly, thank god, we have since found that she has done an IVA. It seems as though all the companies involved have to agree and this company that she has the loan with are the last to decide whether they accept the agreement. It is a possibility still, that they may not, and my partner still has to continue payments. We shall see. But bankruptcy is not an option for us. We don't owe enough money to be bankrupt.

Nonetheless, lessons have been learned , she's lost out on a 20 year friendship which you can't buy back with money even if it were a million quid.

Thanks again guys.

[themas]

For an IVA to become operative 75% of creditors by value have to vote in favour. Any who don't approve it are then committed. So it could be that the creditor you are concerned about will be committed whether they approve or not. What I don't know is where this leaves your partner as guarantor. I would hope the creditor then cannot chase her but it may be that there is some provision in the legislation which means they can still go after her, because they will not get full repayment from the debtor.