Father in Debt

[done4now]

About 11 years ago (when I was still in secondary school) my father bought a house in the UK for my sister and her boyfriend as they were unable to get a mortgage. To get around this my father put up another house he owns as collateral and he bought the house for them. At this stage my father has the family home, a house in his hometown (mortgage collateral), he had a 50% in another house his parents left to him and the house in the UK.

So my sister breaks up with her boyfriend and moves back to Ireland but the crash has just happened, pound weakens against the euro and now my father is in massively in the red. My father finally end up selling the house taking a €100k+ loss. He doesn't do a big switch back to euro instead he just uses the money to make the monthly repayments + insurance (which is very high due to my fathers age) we are talking about a repayment of €3k a month all in. So after a while the money runs out. So my father sells the other house he owned 50% in but despite this he is still in the red.

He has €50k in his bank account but he owes the bank €75k. All would be okay except for the fact the bank don't want to extend the mortgage past my fathers next birthday. My father told me they will have to sell the other house (which the mortgage is against) to pay off the debts but he'll lose 33% of the sale due to Capital Gains Tax. Or sell the family home but then they'll have move back to my fathers hometown which is a four hour drive which neither of my parents want.

He is trying to get a job (in Education) but while he is being successful in the interviews once the school try and get him a contract the state dept won't give him one because of his age. Apparently state depts can be ageist but private companies cannot.

He has asked me if I would be able to get a loan out and he'll cover the repayments. I told him no as I don't want to repeat the same mistakes as he did. Thing is I have saved up enough money to actually nearly wipe out all of the mortgage but as selfish as it sounds I want to use that money for myself as I want to go travelling with it and have a good safety net.

My two older sisters won't help as they both now have families of their own and this somehow makes them ineligible to help out. I feel likes it up to me to help out because I'm the youngest and because I'm single I can afford to lose my savings that I've worked hard to build up.

I hate to see my father in this mess and I would love to help out but if I've learned anything from his mistakes is that never lend money to a family member.

I've told him to get in contact with MABS but as of yet he hasn't.

Is there anything I can do to help him out?

 

[noproblem]

Personally if it was me I would help him but my wife tells me she wouldn't let me. Make what you want out of that. If you really don't want to see him suffer and you mean that then the answer isn't difficult. However, we're all different, although on another side of the track i'd be amazed the bank won't do some deal, but then again he has assets which can pay everything.
Oh, by the way, how much do you reckon he's given you over the years and wanted nothing back, never asked for it or never will? Not a bad guide to go on.

 

[dub_nerd]

Is one of the two older sisters the one for whom the original UK house was bought? And now she's refusing to help out? Sweet! Sounds like a bit of a "King Lear" situation going on.

It sounds like your father has enough assets to cover everything. It's just "a cash flow problem". You could consider lending him the money. BUT: engage a solicitor, make him pay for the costs of that, make sure the loan is secured on his assets, make sure this is reflected in his will (which needs to be drawn up if he doesn't have one), make sure the agreement prevents him from reducing his assets below a certain level, make sure he understands that the assets would not be available to cover (for instance) Fair Deal, equity release schemes, or anything else that he might want to avail of in future. There's a reason banks don't want to go beyond a certain age -- people's needs change.

Basically, sew it up as tight as any other sensible lender would, or else let him take his chances with the bank. Oh, and after all that, you're still taking a big risk, so consider something to cover the intangible cost of that too, perhaps an additional consideration in your father's will. If it all sounds massively messy and complicated ... it is.

 

[cremeegg]

First of all if you are being asked to help you have a right to get complete clarity on the situation.

Do I understand correctly that the situation at present is that he owes the bank €75k and they want repayment within a year. He has €50k in cash.

If that is the case he should start by telling the bank that he is not in a position to do so and he will make payments of €x per month. He should offer a reasonable amount that he can afford every month and will clear the loan in say 10 years.

The bank will not be rushing into court to repossess the house.

Should you get a loan to help your father. At the present, absolutely not.

He should go to Mabs, they will give him detailed advice along the lines above. If he hasn't gone because he is too proud, well sorry but he should grow up.

If at some point in the future your father is unable to make some payments under an arrangement of that sort along the way, then maybe GIVE him the money to do so.

The questions you need to be asking yourself are not "do I help my father" versus "I want to use my money for my own future" the questions are "what is the best way out of this mess, what do MABS suggest" after that you may want to support your father in implementing a solution.

Talk of having to move house is overexcited nonsense, unsupported by the facts you outline.