Most older people in Irish society may have escaped getting caught up in the property bubble in recent years: however, they may still have to pay the price. Many parents may have signed guarantees for their children who were trying to get on the property ladder, and this may come back to bite them.
As Shakespeare once said, “neither a borrower nor a lender be”, but what about the guarantor? If you are concerned about loans you may have signed as a guarantor for someone, then you can now get advice from the Insolvency Service Ireland (ISI). The ISI is an independent statutory body that was established by the then Minister for Justice and Equality, Alan Shatter TD, in 2013.
Since its inception, according to spokesperson John Phelan, Head of Policy at the ISI, there has been a worryingly low uptake in enquiries. “The beginning of this year is when we saw the first applications, so we don’t have a huge track record…the number of applications we have gotten isn’t as high as we would have expected,” said Mr Phelan.
“You certainly get the impression from a lot of media coverage on mortgage arrears that there are a lot of people out there in trouble; however, they haven’t come flooding in to us. We did some research over the past couple of months to see if we could improve that. We think it was due to our fees, which may have been putting people off, and hence we have decided to suspended them until next year,” said Mr Phelan, who added: “I hope that that means we will see a big pick-up in applications.”
To date the ISI has had 1,200 applications, and the 55-plus age category accounts for 12 per cent of those.
“Where we are seeing cases that involve older people, it is often where they have given guarantees to their children, and that can leave somebody in a bad enough situation,” said Mr Phelan.
“I don’t have any figure on it, but it is relatively common for older people, especially in Dublin. At some point perhaps ten years ago their son or daughter—often in their thirties or forties, or maybe even in their fifties—were buying property, doing business deals, and at the request of financial institutions they were asked for personal guarantees, and at some stage their parents came on board. Now it’s all gone sour,” he said.
Indeed, Mr Phelan emphasised that for such people, there is a real chance that banks could call in those guarantees.
If you need advice on bank guarantees or mortgage debt, then visit www.BackOnTrack.ie for assistance.
