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Father in Debt

2

Comments

  • #32
    Hitman3000
    Closed Accounts Posts: 5,596 ✭✭✭Hitman3000


    GingerLily wrote:
    Yes he is selfish the ways he's treating the OP, he was generous with the OPs sister and even when into debt for her but wants the OP to give up their life savings. Why can't the father just give up the extra house, what's the difference?


    He asked for help, I read the Op' s post again. Can't see where the father asked the OP to give up their life savings. Maybe you can highlight the part I missed.


  • #33
    fishy_fishy
    Registered Users, Registered Users 2 Posts: 452 ✭✭fishy_fishy


    Hitman3000 wrote: »
    He asked for help, I read the Op' s post again. Can't see where the father asked the OP to give up their life savings. Maybe you can highlight the part I missed.

    He asked the OP to take out a 25k loan. More than the OP has in savings. That's effectively worse than giving up th savings because there's interest and what exactly happens if the father can't meet the repayments?

    The father got himself into this arrangement when the OP was still a schoolchild. Why should the op give up her savings or take on a massive loan, jeopardising her ability to build her own life, to bail out the mess her father is in? A mess he got into for her sister.

    I'm sorry but this is not the OP's problem. The father actually owns another property that he could sell to clear the debt but doesn't want the CGT hit. He has €50k in savings.

    But the OP is supposed to bail him out? With no house at all and less than half the savings?


  • #34
    fishy_fishy
    Registered Users, Registered Users 2 Posts: 452 ✭✭fishy_fishy


    Btw OP, he wouldn't be paying 33% tax on the proceeds of the sale. He'd be paying 33% on the excess of the proceeds over the indexed cost (i.e. The profit)


  • #35
    Hitman3000
    Closed Accounts Posts: 5,596 ✭✭✭Hitman3000


    fishy_fishy wrote:
    He asked the OP to take out a 25k loan. More than the OP has in savings. That's effectively worse than giving up th savings because there's interest and what exactly happens if the father can't meet the repayments?


    The OP stated he/she has nearly enough saved to wipe out the 75k mortgage. Did you read the first pist?


  • #36
    GingerLily
    Registered Users, Registered Users 2 Posts: 4,766 ✭✭✭GingerLily


    Hitman3000 wrote: »
    The OP stated he/she has nearly enough saved to wipe out the 75k mortgage. Did you read the first pist?

    It makes no logical sense for the OP to loan their father money when the father could just sell the investment.

    It's actually disgusting that the father is putting his child in this situation. It would be different if he'd have to sell the family home, but this is about an investment property which he can't afford.


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  • #37
    Hitman3000
    Closed Accounts Posts: 5,596 ✭✭✭Hitman3000


    GingerLily wrote:
    It's actually disgusting that the father is putting his child in this situation. It would be different if he'd have to sell the family home, but this is about an investment property which he can't afford.


    He asked his child for help, the child refused. Hopefully the father decides to sell all his properties to meet the debt except his home. Lastly he won't but if I were the OP's dad I'd leave my entire estate to a dog or cat home. In light of how willing my children were to help me when I needed it.


  • #38
    Hitman3000
    Closed Accounts Posts: 5,596 ✭✭✭Hitman3000


    GingerLily wrote:
    It makes no logical sense for the OP to loan their father money when the father could just sell the investment.


    Btw again please read the first pist on this thread as you clearly haven't done so.


  • #39
    GingerLily
    Registered Users, Registered Users 2 Posts: 4,766 ✭✭✭GingerLily


    Hitman3000 wrote: »
    He asked his child for help, the child refused. Hopefully the father decides to sell all his properties to meet the debt except his home. Lastly he won't but if I were the OP's dad I'd leave my entire estate to a dog or cat home. In light of how willing my children were to help me when I needed it.

    He doesn't need the money - he needs to talk to a financial advisor and get professional help


  • #40
    kylith
    Registered Users, Registered Users 2 Posts: 17,739 ✭✭✭✭kylith


    Hitman3000 wrote: »
    He asked his child for help, the child refused. Hopefully the father decides to sell all his properties to meet the debt except his home. Lastly he won't but if I were the OP's dad I'd leave my entire estate to a dog or cat home. In light of how willing my children were to help me when I needed it.

    The father can do as he likes with his estate. It's shameful to ask your child to put themselves into debt when you have a house other than the one you live in and 50% of a third house.


  • #41
    meeeeh
    Registered Users, Registered Users 2 Posts: 11,624 ✭✭✭✭meeeeh


    If I understand correctly, after selling house in UK, he has 75k loan. He also outright owns two houses and has 50% share in another and has 50k in bank. Are any of them generating rent income? Even if not, there are people in a lot worse financial situation. He definitely needs to see some sort of financial adviser but unless he is generating some income from other properties, what is the point owning them. Unless you want a share in one of the properties I can't understand why he needs your financial help.


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  • #42
    LegacyUser
    Registered Users, Registered Users 2 Posts: 166,012 ✭✭✭✭LegacyUser


    Hitman3000 wrote: »
    He asked his child for help, the child refused. Hopefully the father decides to sell all his properties to meet the debt except his home. Lastly he won't but if I were the OP's dad I'd leave my entire estate to a dog or cat home. In light of how willing my children were to help me when I needed it.

    Sometimes you have to be cruel to be kind as they say. How is the OP putting their financial security at risk any help to anyone? Rather than just throwing money at things they should sit down with a financial advisor and look at options. As someone pointed out as they sold two houses for a loss they may not have to pay CGT or there may be other circumstances we are not aware of that could reduce the cost. They should sit down as a family, all the siblings and father and look at the options. The OP seems more annoyed that they are expected to put their life on hold while their siblings are not.

    My mother was like the father here in that she was holding on to two houses because she wanted my siblings and I to inherit them but we sat her down and told her not to be so old fashioned, this obsession people have with leaving stuff for kids I've not time for. My Granny sat on a massive chunk of money she could have used to make her last years easier but she kept telling my mum how she was going to inherit it etc etc....we told our mum she'd spent enough on us and to go enjoy herself. Sold the houses, downsized to a flat in France and living the good life for her. We will get nothing when she passes away and I couldn't care less.

    It's also easy for people to say they'd give up their life savings when it's hypothetical, different kettle fish when you are actually asked to do it.

    OP I would figure out a way as a family to get your dad out of debt without putting an unfair amount of the burden on you. Talk to MABS or a financial advisor


  • #43
    Goat the dote
    Registered Users, Registered Users 2 Posts: 726 ✭✭✭Goat the dote


    meeeeh wrote: »
    If I understand correctly, after selling house in UK, he has 75k loan. He also outright owns two houses and has 50% share in another and has 50k in bank. Are any of them generating rent income? Even if not, there are people in a lot worse financial situation. He definitely needs to see some sort of financial adviser but unless he is generating some income from other properties, what is the point owning them. Unless you want a share in one of the properties I can't understand why he needs your financial help.


    From what I understood the 75k was owed after selling the share in the third house?
    So he has savings of 50k, and owns his residential property and a second home.
    It’s a no brainer, sell the second house. Pay off the debt and the cgt bill that would result. Do what you want with the rest.

    I wouldn’t be willing to give him my savings, given that he’s only in this situation because he bought a house for a sibling, coupled with the fact that he has his own savings AND a second property. There’s nothing to indicate that the OP would be “rewarded” with a house in the fathers will.
    I would maybe be willing to help out partially in conjunction with the sibling that caused this, and other siblings. But no way would I carry the can alone.


  • #44
    LegacyUser
    Registered Users, Registered Users 2 Posts: 166,012 ✭✭✭✭LegacyUser


    Hi OP,

    Feel for you in this. I lost my own father when I was 17 so I know the importance of the relationship but equally there's no point throwing good money after bad.

    It seems from the very beginning your dad has been making bad decisions and honestly I think he'd be better served in getting proper financial advice than getting your name on a loan he intends to repay.

    It's not clear just how big your savings are, if they are 75k (i.e. the full outstanding mortgage) then you have significant earning capacity (and importantly, saving capacity depending on how long you have been saving) which changes what you should do imo. If so, and you are able to help him out I think you should, though that's without knowing the family dynamics (and I know internal family loans can turn things poisonous pretty quickly).


  • #45
    Paddy Cow
    Closed Accounts Posts: 6,576 ✭✭✭Paddy Cow


    From what I understand the father bought a house for his daughter and her boyfriend. They split up. The father is now in dept and he could get out of it by selling another property but he doesn't want to pay the tax. Neither the original daughter who he bought the house for or another daughter are willing to help.

    The op has savings which presumably s/he worked hard for but somehow they are selfish for not handing them over to clear the father's debts??? That's insane.

    Op I think you are right. You have learned from your father's mistakes and don't want to get involved in a financial mess. Your father could sell the other property and clear his depts. He doesn't want to do this. That's his choice.

    Taking out loans for family is tricky. I once took out a 6,000 euro loan for a close family member who swore they would pay me back 50 a week until it was payed off. Never again. I was only on 300 a week and sometimes they didn't make the payment which set me back. Once they didn't pay for three weeks and I really struggled. They kept track of everything they paid (as did I) and one day they announced to me that they had paid me the 6,000 and we were even. I was shocked and had to have a very awkward conversation where I told them it was a bank loan and that meant there was interest and as I had taken out the loan to help them, I shouldn't be liable for the interest. The interest was quite substantial, over 1000 but they were having none of it. They told everyone that I gave them a loan and then charged them interest. About a year later they apologised and gave me the interest but I never had the same relationship with them again. Lesson learned. Never take out a loan on someone else's behalf unless you have a contract signed by both parties on repayments.

    The Op's father doesn't NEED the loan. He can pay his debts but will incur taxes. I think it is very unfair of him to put the op in this situation. At his age he should have the wisdom to be encouraging the op to go travelling and when s/he comes back buy a house with their hard earned money, not asking them to bail him out so he can save on a tax bill.

    To all the people saying the father should sell his property and leave what's left to a dog shelter, the op isn't relying on inheritance and has the means to buy their own place. It's not the op's fault the father made bad investments and they shouldn't be guilted into bailing him out when he has other options/daughters available.


  • #46
    Hannibal_Smith
    Registered Users, Registered Users 2 Posts: 7,426 ✭✭✭Hannibal_Smith


    Which home did he put up as Collateral?

    After the mess up with your sister, and selling the uk house your dad owed 100 k, yes? After selling a 50% share in another house he still owes 75k? To who? The mortgage bank in the UK? He tried to make repayments on the outstanding 100k, but that lead to the sale of the 50% house share sale?

    No one forced your dad to buy a house for your sister and her boyfriend. Tbh that doesn't sound right. Did your dad by a house for you all? Why only for your sister, if not?

    He needs to talk to a financial advisor. The property he sells, the 33% would be based on any profit, less expenses like legal fees etc. Would there be a profit on this outstanding rental property?


  • #47
    LegacyUser
    Registered Users, Registered Users 2 Posts: 166,012 ✭✭✭✭LegacyUser


    I don't want to dwell on the fact as to why my other sisters aren't helping out but to put it simply it would be their husbands who would be fronting the cash as my sisters became part-time / low paid workers after having kids. I cannot see their husbands wanting to do it either.

    The outstanding amount is 75k on the mortgage and my father has now 50k in savings after selling a house he had a 50% share in. So if he uses the 50k to pay off the mortgage he'll have 25k left to pay off.

    The none family home is not rented out and it hasn't been for a sometime now. My father wanted to use his savings to do up the house and get the rent from that house to pay off the remaining amount of the mortgage as he could probably get 7-8k (before tax) a year from it. So that is why asked me to get a loan as he would give me the rent to pay it back.

    He was in with the bank today and they advised him to sell everything so the family home, the other house and to downsize to a smaller property.

    My father wanted to leave us all a property each but we've all told him multiple times that none of us are expecting that at all we'd much rather he would have that money to himself.


  • #48
    GingerLily
    Registered Users, Registered Users 2 Posts: 4,766 ✭✭✭GingerLily


    So there are four houses?

    One sold for 50k profit

    One family home

    One house in UK with 75k owed

    One vacant home that is not being rented and needs renovation

    How much in negative equity is the UK house? Surely it can't be that much?

    Why can't he use the 50k to renovate the dormant house?

    Why are the bank telling him to sell everything? Is he in mortgage arrears on the family home?

    This whole situation seems extremely messy and your father isn't managing it well at all.


  • #49
    Penn
    Registered Users, Registered Users 2 Posts: 35,680 ✭✭✭✭Penn


    FatherInDebt wrote: »
    The outstanding amount is 75k on the mortgage and my father has now 50k in savings after selling a house he had a 50% share in. So if he uses the 50k to pay off the mortgage he'll have 25k left to pay off.

    The none family home is not rented out and it hasn't been for a sometime now. My father wanted to use his savings to do up the house and get the rent from that house to pay off the remaining amount of the mortgage as he could probably get 7-8k (before tax) a year from it. So that is why asked me to get a loan as he would give me the rent to pay it back.

    So he's 75k in debt, has 50k savings and owns a non-family house sitting idle. And instead of selling the non-family house, clearing his debt and possibly even having some money left over (depending on the condition and location of the house), he wants you to take out a loan to clear his debt so he can spend his 50k doing the house up and maybe clearing 5k profit a year from it to pay you back?

    You and your sisters need to sit down with him, tell him to sell the house instead of renting it and clear his debts. It was a mixture of bad luck and eyes bigger than his stomach that got him into this situation by not only buying your sister a house but also the other houses he bought and the property crash, but to ask you to take out a loan to clear the debt, then pay you back with rent... he's being completely unreasonable and you shouldn't put yourself and your finances in that situation.

    I understand he wants to leave you and your sisters with property or money, but he's doing so at great risk which could leave you all worse off. At the very least, sell any non-family home and see how things lie then.


  • #50
    Hannibal_Smith
    Registered Users, Registered Users 2 Posts: 7,426 ✭✭✭Hannibal_Smith


    Your father is not in a mess. He has options open to him. You are right not to throw more money at the problem. He should get financial advice...independent financial advice.


  • #51
    December2012
    Registered Users, Registered Users 2 Posts: 4,695 ✭✭✭December2012


    Why not sell one of the properties to you now?


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  • #52
    LegacyUser
    Registered Users, Registered Users 2 Posts: 166,012 ✭✭✭✭LegacyUser


    FatherInDebt wrote: »
    My father wanted to use his savings to do up the house and get the rent from that house to pay off the remaining amount of the mortgage as he could probably get 7-8k (before tax) a year from it. So that is why asked me to get a loan as he would give me the rent to pay it back.

    OP managing a rental property is a lot of work, just look at the accommodation forum for people having nightmares with tenants not paying rent and causing damage to the house. Even if all goes ok you'd either have to manage the rental or pay someone to and there are a lot of costs that pop up (speaking from experience here) Looking to solve one debt by pretty much creating another one is not the best solution.

    I think you need to be firm with your dad saying you don't need him to leave anything, you'd rather he be out of debt and comfortable for his remaining years then stressed trying to put money/properties aside for you.


  • #53
    meeeeh
    Registered Users, Registered Users 2 Posts: 11,624 ✭✭✭✭meeeeh


    December2012 wrote: »
    Why not sell one of the properties to you now?

    That's assuming op wants it and I don't think they do.

    Op there no point getting advice from the bank, they are their to take care of their loans and not to manage your father's properties. Your father needs to talk to independent financial adviser or a solicitor who deals with this kind of stuff. He needs someone in his corner to go with him through all available options.


  • #54
    retro:electro
    Registered Users, Registered Users 2 Posts: 21,039 ✭✭✭✭retro:electro


    Okay knowing further details I think I jumped the gun with my advice initially. I think your father is being completely unreasonable.


  • #55
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    OP- honestly- all I can do is concur with the consensus here- and say that your Dad should get good independent financial advice.
    The whole notion of leaving a property each to his children- is all well and- but the simple fact of the matter is- none of you seem to want to become landlords- and there is debt overhang and at least one mortgage to factor into the equation.

    Your father is currently carrying a capital loss- which is classified as an asset (believe it or not)- which can be offset against a gain on the disposal of another asset.

    The only thing that makes any sense whatsoever- from what you've told us thus far- is the property in positive territory gets disposed of, the taxable gain is largely wiped out by the loss incurred on the other two properties- and your Dad still has the derelicy property to do up- and his 50k intact (and he hasn't siphoned off the OP's hard earned money either).

    Personally- I think life is short- and I don't see any parent shouldn't enjoy their twilight years without worrying about their finances. I think the whole notion of leaving 4 properties to the 4 kids- is nutty. The Dad deserves peace and quiet- and time on a golf course (or doing whatever he enjoys to do)- he doesn't need the hassle of managing a tenancy in today's world.

    Looking at the finances- if your Dad needs 50k to do up the derelict property, and he'll only get 6-7k gross from it after its done up- it makes no sense whatsoever to do it up- he would be best advised to flog it to whoever offers him the best deal- and using the 50k to do whatever the hell he wants to do- that isn't related to letting property.

    I think the father has the best of intentions- however, the OP is seen as having a lumpsum that he can tap- and the other kids have young children and partners etc- so money is not as readily available. The OP is being seen by her siblings as a soft touch- who is key to unlocking all of this for their Dad- when its the last thing on earth she wants.

    OP- I sympathise with you- you're in a pretty despicable situation- which is totally unfair on you.


  • #56
    Tenigate
    Closed Accounts Posts: 849 ✭✭✭Tenigate


    Op, sorry for posting again. This resonates with me.

    I was chatting to a counsellor once.

    She said how her client was a man aged 70, very upset about his children. They didn't disappoint him, but he was disappointed in himself. His kids were grown, married with kids, and had jobs. But he was annoyed they didn't have good enough jobs, or good enough cars, or enough savings, etc.

    It's a generational thing. Your foolish dad, at some stage decided he'd set you all up for life. An obligation he put it on himself. He might even have spoken it out loud to some people. Now, you're all fine. You don't need him. You personally have more savings than he does. His daughters have husbands and families and don't want anything to do with his money or finances, because they're too busy taking care of their own.

    I think it's a matter of pride for your dad. Despite the liquidity problem, he has equity! So sadly, he's passing an obligation on to you, without adequate consideration of the downsides. In his head, he's minimising the risk, but he's flipping a coin and asking you to accept the burden.

    And op, i personally can tell you how this worked out for me and my siblings..

    So my advice. If he'll assign the house to you as security for the loan and you're strong enough to follow through on liquidating it if he fails to meet payment terms, and know you may be cut out of his will for even suggesting such an arrangement, and knowing it may affect your ability to travel or borrow or have the dignity of making simple financial arrangements for years to come.. yea, go for it.

    But.. he's deluded. He's paying a mortgage on a vacant house. He doesn't have the finances to repay you if he pays the mortgage, and if you take a personal loan it's a short term with 2x or 3x the interest. He refuses to seek or take sound financial advice. This is rooted in his psyche.

    I think you've already made your decision. "The road less travelled" might be worth the read for both you and your dad. Personal progression comes from growing by learning from your children.


  • #57
    Toots
    Administrators, Business & Finance Moderators, Society & Culture Moderators Posts: 16,978 Admin ✭✭✭✭✭Toots


    Is there a mortgage on the family home also? Why did the bank advise him to sell that if the sale of the vacant house would clear his debts?


  • #58
    listermint
    Registered Users, Registered Users 2 Posts: 34,405 ✭✭✭✭listermint


    FatherInDebt wrote: »
    I don't want to dwell on the fact as to why my other sisters aren't helping out but to put it simply it would be their husbands who would be fronting the cash as my sisters became part-time / low paid workers after having kids. I cannot see their husbands wanting to do it either.

    The outstanding amount is 75k on the mortgage and my father has now 50k in savings after selling a house he had a 50% share in. So if he uses the 50k to pay off the mortgage he'll have 25k left to pay off.

    The none family home is not rented out and it hasn't been for a sometime now. My father wanted to use his savings to do up the house and get the rent from that house to pay off the remaining amount of the mortgage as he could probably get 7-8k (before tax) a year from it. So that is why asked me to get a loan as he would give me the rent to pay it back.

    He was in with the bank today and they advised him to sell everything so the family home, the other house and to downsize to a smaller property.

    My father wanted to leave us all a property each but we've all told him multiple times that none of us are expecting that at all we'd much rather he would have that money to himself.

    Your sister needs to sort this out. I don't give 2 hoots if she has a husband she came along with her debt and baggage it's her debt.

    If she is weasling her way out of it then she is shameless. She needs to toddle of and get a loan out and pay it off. To be frank she's got off bloody light with 25k and that's it.

    You should steer well out of this.


  • #59
    Big Bag of Chips
    Administrators, Society & Culture Moderators Posts: 15,633 Admin ✭✭✭✭✭Big Bag of Chips


    OP, the figures don't really make sense. So either your dad is confused about the whole thing, or you are. Also owing €75,000 with €50,000 in savings is a fantastic position to be in, and if he talks to the bank about settling for a cash sum, they might be happy to take the €50k and write off all, or at least part of the remaining loan.

    Not wanting to extend the mortgage past his next birthday? That doesn't make sense either. Surely when the original terms of the mortgage were drawn up they knew his age and what age he'd be by the time the mortgage was paid off.

    Your dad sounds a bit confused/clueless when it comes to financial matters and that is not the type of person you want to be involved with in any sort of financial arrangement. My friend and her parents have not spoken in close to 10 years over a similar arrangement, that left my friend very much out of pocket, and in court.

    You need to remove yourself for once and for all as a 'get out' for your dad. Make it clear to him that you are not in a position to offer any financial assistance. For as long as you are a 'maybe' in the background, your dad won't really make any effort to sort this out for himself.

    Your sisters aren't in a position to help and dint feel guilty about it. Take a leaf out of their book.


  • #60
    Tenigate
    Closed Accounts Posts: 849 ✭✭✭Tenigate


    listermint wrote: »
    Your sister needs to sort this out. I don't give 2 hoots if she has a husband she came along with her debt and baggage it's her debt.

    If she is weasling her way out of it then she is shameless. She needs to toddle of and get a loan out and pay it off. To be frank she's got off bloody light with 25k and that's it.

    You should steer well out of this.

    Think about it.. at some stage her dad, who held a value that he was going to set his kids up with a house, Purchased a house his daughter would never have bought herself. In an ideal situation, property is an asset which increases in value. In this situation, it did not and the father lost his investment.

    The bank simply wouldn't give her or her husband a loan given their circumstances. The irony is the father is now in this position himself and is pushing his son to take out a loan under similar circumstances.


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  • #61
    Tenigate
    Closed Accounts Posts: 849 ✭✭✭Tenigate


    Toots wrote: »
    Is there a mortgage on the family home also? Why did the bank advise him to sell that if the sale of the vacant house would clear his debts?

    The family home doesn't appear to be mortgaged.
    Sale of the vacant house makes sense, from the bank's pov, to clear the mortgage.
    Sale of the family home is often good advice for a couple with an empty nest.. Probably a damp old house with no downstairs bathroom, a dodgy extension and too many bedrooms. But often plenty of potential and a decent site.


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