Teachers caught in $1.9m loan guarantor mess

Two teachers at a St Catherine-based high school are warning Jamaicans to think carefully before acting as guarantors for loans taken out by associates, as a fellow co-worker has left them with a hefty bill after filing for bankruptcy, even as they also struggle in the current economic climate.

Tanica Plummer said that she never gave it a second thought when her co-worker asked her to act as guarantor for a loan of $1.9 million.

Plummer, along with another teacher at the school, Nalene Martin, co-signed in good faith and had no doubt that their co-worker would honour the agreement with WorldNet.

In a interview with The Gleaner, Plummer said that it wasn’t long before they discovered that things were not going according to plan and were alerted to the non-payment of the loan.

“We reached out to her and she pretended that she would make good on her obligation as the borrower,” shared Plummer.

She said that her co-worker was cooperating in the first instance, but then things got nasty when she discovered that they, as the guarantors, were investigating her every move, which revealed that she had filed for bankruptcy and immediately started borrowing again.

“At first, she started sending us nasty texts, then she eventually blocked us on all platforms,” Plummer shared.

CANNOT ABSORB LOAN

Realising the predicament they were in, Plummer and Martin wrote to the loan company, explaining that they were themselves struggling, having their families to take care of, and could not fully absorb the loan in its current form.

Plummer revealed that she had lost four family members within the past nine years, two of whom she was personally responsible for burying. She said it had a profound impact on her emotionally and financially. Added to that, she recently gave birth to her second child.

Martin, who also co-signed as guarantor, had to bury her oldest sister in August of this year and is now tasked with taking care of her sister’s children – the youngest being four, the same age as her son.

“We poured our hearts out in the letter. We were not looking to be absolved, but for more manageable terms,” Plummer said.

She said that the company explained that because the borrower had filed for bankruptcy, she was legally protected and it was now the guarantors’ responsibility to settle the debt.

“It is an uphill battle for both of us guarantors, and it is for this reason we want our story out there so others will not be caught in the same trap,” a despondent Plummer said. “No matter how touching the pleas or the situation, do not do it. Don’t stand guarantor, because when they default, you will be left with a debt you didn’t incur.”

Weighing in on the situation, Winsome Witter, founder of Serenity Advisory Consulting Services, pointed out that acting or signing as a guarantor means one is promising to repay someone else’s loan or mortgage if they can’t afford to.

“In general, it’s wise to only agree to being a guarantor for someone you know well; however, people’s financial position may change due to varying circumstances,” she said. “For instance, the current economic climate has resulted in job losses, drastic reduction in business revenue, and even business closures.”

Witter pointed out that a situation such as this could impact the guarantor’s credit score.

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