Joint & Several Liability

[newborn]

Hi

I have significant RIP borrowings in my own name with a lender and of all facilities are operating withing terms.

However I have other faciliites with 2 other parties who stopped paying (the asset is not producing income). Sale of the property which we are anxiouis to effect asap will result in a shortfall and the bank is refusing to individualise the shortfall. Given that there are 3 parties involved this appears unduly harsh.

Does anyone have any experience of Banks allowing individual proportionate settlement of shortfall in a J&S situation?

 

[Brendan Burgess]

Given that there are 3 parties involved this appears unduly harsh.

Why is this harsh? The lender did not make three separate loans. They made one joint and several loan to the three of you. They probably only lent the money based on your better credit rating and wealth.

You don't have a legal case. However, you might be able to construct a fairness case, although you have not provided any evidence of this in your post. For example you could argue that you have done your very best to repay the loan. You have made personal sacrifices. You have encouraged the other two to pay their way. You have put pressure on them to agree to sell the property thus minimising the bank's losses. You could ask the bank to recognise this contribution you have made. They have no legal liability, but they might, although it's a long shot.

 

[newborn]

Why is this harsh? The lender did not make three separate loans. They made one joint and several loan to the three of you. They probably only lent the money based on your better credit rating and wealth.

You don't have a legal case. However, you might be able to construct a fairness case, although you have not provided any evidence of this in your post. For example you could argue that you have done your very best to repay the loan. You have made personal sacrifices. You have encouraged the other two to pay their way. You have put pressure on them to agree to sell the property thus minimising the bank's losses. You could ask the bank to recognise this contribution you have made. They have no legal liability, but they might, although it's a long shot.

Thanks v much for your advice. As a matter of fact the loan would have been made on their strength rather than mine at the time. I think full co-operation and some effort to demonstrate my inability to deal with the debt in its entirety are my only hope..........I am genuinely trying to resolve this but do find the catch all prospect of being liable if other people don't perform hard to stomach......but in the end appreciate that the Bank has to do what it can to get as much money back as possible.

If none of this works and they decide to simply call default and go legal, can the Bank go for judgement for the entire loan balance in advance of a sale of the property and then simply use the proceeds as part settlement of same in due course ?

 

[Brendan Burgess]

If none of this works and they decide to simply call default and go legal, can the Bank go for judgement for the entire loan balance in advance of a sale of the property and then simply use the proceeds as part settlement of same in due course ?

Yes. But you may be able to come to some arrangement with them by agreeing to cooperate and to sell the property voluntarily.

Brendan

 

[Bronte]

However, you might be able to construct a fairness case,

They have no legal liability, but they might, although it's a long shot.

This would be a waste of time, appealing on a bank for fairness. Legally the OP is liable and if he can afford to repay they will make him pay. Taking his assets if necessary.

OP might be better off trying to put pressure on the other two borrowers.

 

[hastalavista]

OP: the bank will go after all 3 of you in //.

What paperwork did the 3 of you have in place between yourselves.

Normally this paperwork would provide for such things as how the asset can be sold, how expenses will be shared etc and have a clause allowing anyone who pays out under the J and S gtee to sue the others

 

[newborn]

OP: the bank will go after all 3 of you in //.

What paperwork did the 3 of you have in place between yourselves.

Normally this paperwork would provide for such things as how the asset can be sold, how expenses will be shared etc and have a clause allowing anyone who pays out under the J and S gtee to sue the others

Unfortunately no paperwork/ partnership agreement..........

My best bet seems to be to offer to pay whatever I can and see if this is acceptable..........i don't have any other assets so perhaps this would be preferable to the Bank........