# Country pub in endless debt



## struggling1 (13 Sep 2011)

Hi, I own a large country pub, and a few years ago just as the recession hit, my husband took out loans on the pub €400,000 of which I knew about and signed for, we were going to get planning permission for land when times were good, this never happened and now the price of land has dropped so its not worth sellng them. Other loans however were taken out to cover up personal debt on my husbands part, I did not sign for for other large amounts. The business is in both our names, surely the bank should have never legally been able to provide these loans knowing of the times Ireland was entering without both our signatures? Can legal action be taken against the bank? We obviously cannot pay back these loans and it effects our daily runnings of the business as it has gone quiet and any profit we make has to be paid to the bank. 

On top of this insurance companies and revenue are on our back for arrears and it is not as simple as just closing the pub down because the family home would be in jeopardy, there is no mortgage owed to the home but the bank would in effect own it if the pub closed.

Any advice is welcome..


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## sean.c (16 Sep 2011)

You need to provide more info; here's now I understand it;

1. Loan of €400k taken out by both of you, secured against the pub.
2. Multiple Loans of €xk taken out by your husband, secured against the pub.
3. Insurance arrears
4. Revenue arrears
5. No mortgage on the house

I have a few questions;
a) Why is the house at risk?  AFAIK the family home is generally protected against creditors.
b) Did your husband take out loans secured against common property (the pub, the house) without your consent?

Is that correct?


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## onq (16 Sep 2011)

You need to get your house in order immediately - start by prioritizing any payments due to to the Revenue Commissioners.
As for the rest, there are a lot of inconsistencies in your post and with the greatest respect I have nothing to offer you but some hard advice.

Address the insurance issues - why are insurers pursuing you? Is it simply that you haven't renewed your insurance on the public house? Are you trading without public liability insurance?
Address your husband's "personal debt" - prevent him accessing the accounts until he gets his "personal debt" under control. Like the rest of us, he'll have to live within his means.
Address the issue of the €400,000 loan? Was this used for the intended purpose of buying land? Was it just frittered away? Was it used to pay your husband's "personal debt"?


Don't just lay down under this. 15% of people unemployed means 85% of  people employed and unemployment was never much below 5% so that's 10%  of a difference. 10% of a reduction in trade is due to reduced numbers in jobs, the  rest is down to people tightening their belts. You can fight  against all this.

Address the issue of renewing the business' profitability. You have to increase turnover and cut costs to raise profits out of which you have to pay your debts. To do this you'll have to attract footfall. Start special offers, for example €3.00 pints from 7.30 pm until 9.00 p.m. to get the punters in. Musical evenings. Special childrens events at the weekends in the car park.

But unless and until you and your husband get both your act together you could end up running this pub into the ground.
You will need help - don't be afraid to bring in somebody to review how you're running your lives and the pub.
You've taken the first step - asking for advice - now you need to take the next step and get help.


ONQ

All advice on AAM is remote from the situation and cannot be relied upon                             as a defence or support - in and of itself -        should       legal        action    be      taken.
Competent professionals should be asked to advise in                             Real Life with rights to inspect and issue      reports    on     the         matters    at      hand.


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## Bronte (19 Sep 2011)

sean.c said:


> a) Why is the house at risk? AFAIK the family home is generally protected against creditors.


 

This is not true.  

OP your husband took out loans that you did not know about.  This he can do, except for the family home where you have to consent.  In your case it is a home and family business.  You both owe the bank 400K.  If they force a sale, then his other debts will come out of his share of the proceeds.  

Why would you not sell the land and pay back some of the debt?


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## sean.c (19 Sep 2011)

Bronte said:


> This is not true.



I wasn't clear on what I meant.  It is true that if the husband goes bankrupt then all his assets including his share of the family home may be sold.

However, generally speaking the amount which can be realised from such a sale simply isn't worth the bother of going through the process - after all, the assignee can only sell an interest in 50% of the property.  The only person in a position to buy the interest is the spouse (who else is going to buy half a house??), who probably won't have the money to do so, and a judge is unlikely to throw a family into homelessness in order to recover money for creditors.

From liquidation.ie

*Q. Can the family home be sold?* A.  The bankrupt’s interest in the family home vests in the Official  Assignee as with all other property. However the Official Assignee may  not sell the family home without obtaining permission from the High  Court. Where the Official Assignee seeks this permission, the High Court  may postpone the sale of the family home having regard to the interests  of the creditors and of any spouse and dependants of the bankrupt.


​That's assuming that the pub and the house are seperate.  IANAL.


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## Bronte (19 Sep 2011)

sean.c said:


> However, generally speaking the amount which can be realised from such a sale simply isn't worth the bother of going through the process .


 
You are forgetting that in this case before any one gets anything the OP and the husband have both signed away to the tune of 400K.  This means the bank can go to court, force a sale and get the 400K plus costs.  Then if there is anything left it's presumable left 50 50 to husband and wife and then from that share the banks takes from the husband his outstanding loans.  Not sure how much pubs are worth currently, but I'd say the bank would find it worthwhile to pursue for the 400K plus costs.  

Meanwhile revenue will be wanting it's pound of flesh and that isn't pleasant.  Losing the family home would not be nice, but it may not be the worst thing.  

OP would need to seriously get some advice and without figures it's impossible to see where everything is going.  Probably needs professional advice.


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## onq (19 Sep 2011)

Thanks Bronte.

Putting it like that puts me in mind of something I should have advised from the outset.

OP should call into here local Money Advice and Budgeting Service (MABS) Office.

Here is their website.

http://www.mabs.ie/

I found their wisdom and knowledge of the ropes was a Godsend last year


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## Bronte (20 Sep 2011)

Yes Onq but I think Mabs can't deal with commercial, though I'm open to correction on this.


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## onq (20 Sep 2011)

Aha. I stand corrected.

Point taken Bronte, but this sounds like a family business, with personal issues arising that may not be directly related to the running of the business.

In such circumstances I thought they might still be able to help.


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