‘Is it wise to be a guarantor for a family member?’

What's the dilemma?

My brother needs me to be a guarantor on a property for him and his new girlfriend, but I’m not sure about it. Am I the a**hole for saying no?

Can you elaborate on your brother’s situation?

This is the first property he’s ever rented and there’s no one else in our family who earns enough to qualify as a guarantor for them. They do already live in a place that his girlfriend rents, but its too small.

I know he is good for the money and has been in a stable financial position for a couple of years now. The reason he needs a guarantor in the first place is because he has an IVA**, due to a terrible financial decision he made a few years ago (gambling) which drove him into a horrendous debt hole. Thankfully now he has a really good job and earns more than me, and the IVA is due to finish next year.

**An IVA is an individual voluntary arrangement - a formal and legally binding agreement between a person and their creditors to pay back the debt over a period of time. This means it’s approved by the court and the creditors have to stick to it.

Why are you unsure?

Initially I said I was happy to do it for one year until his IVA finished, but asked him if I could do some more research and get back to him to confirm. I then discovered that you cannot be a guarantor for only one year - as the guarantorship will remain in place for as long as they are living in the property.

I was hesitant as I didn’t want to be a guarantor long term. I work in London on 45k a year, I have no savings and am barely scraping by as it is. I asked why his girlfriend’s family couldn’t contribute, but it turns out their financial situation doesn’t allow them to be guarantors either. I then asked why his girlfriend couldn’t rent the property, but it turns out she quit her job when they started dating, so there’s no proof of income for her to be the lead tenant on the new property.

I feel uneasy as I don’t know his new girlfriend or her children (I’ve only met them twice) and from a financial perspective I know that my brother is the main bread winner for them all. They have known each other 6 months in total and she is now pregnant with my brothers first child (a happy accident).

How do you feel about the situation?

I feel a bit uneasy to say yes in case anything goes wrong. I’ve only met his girlfriend twice, and she is super lovely but I don’t feel comfortable taking on that risk for both my brother, and her and her children, in case they broke up or things didn’t go to plan.

But I feel immense guilt as me saying yes feels like their only option. Especially as she is pregnant with my first niece or nephew. It’s hard to explain my reasons to him without offending his new partner which is not my intention at all. I’m worried this will put a wedge between us and make it really awkward at future family occasions. He’s making me feel like I’m their only hope and they have no other options. Am I the a**hole for saying no to being a guarantor for them both? If it came down to it I could not afford my rent and his rent.