Car loan woes cost father's house
Budget Services Nelson is warning parents against guaranteeing loans for children after a young woman defaulted on loan repayments and lost her father his house.
The father had acted as a guarantor for his daughter's loan to buy a car and when she defaulted on repayments the finance company sold his home to cover the money owed as it was entitled to do.
Budget Services community educator Judith Cowley said the story was part of a worrying trend involving younger women struggling with debt.
She warned other parents to never act as guarantors to their children to avoid similar situations.
It was better that children learnt to save and take financial responsibility for themselves or they would get caught up in the credit trap, Cowley said.
Budget Services Nelson issued the warning as part of New Zealand's inaugural money week.
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