Help! My Elderly Dad Is About to Lose His Home!

Hi Scott,
 
Some years ago my dad was approached by my sister and her ex-husband Larry (they were divorced) to go guarantor for a business loan. Larry promised he would repay the loan in three months, and my sister said that if anything happened she’d be there to help.
 
At the time, Larry hired a lawyer to represent my dad and also hired a translator on his behalf. And my dad signed. But (despite the lawyer and translator) I don’t think he understood the full impact of his decision, as there was nothing to his benefit.
 
Fast forward to today and Larry has not been able to repay the loan. Even worse, he has defaulted on the original loan multiple times. Each time, the borrowed amount was increased to cover the principal and interest on the previous loan. Now my dad, who is in his 80s, has received an eviction notice from the Sheriff demanding him to move out by the end of the week.
 
My dad migrated to Australia as a younger man, and he and my mum worked their arses off over many years to pay off their home. My mum postponed her cancer treatment when they bought this house in order to keep working, leading her cancer to advance until it was too late. She passed away more than a decade ago. This house is Dad’s heart and pride, and I can’t bear to see him lose it all.
 
Please, Barefoot, will you save us from this mess?
 
Bill

Bill,
 
This is very, very serious.
 
(And kind of weird, given your dad backed a bloke who’d already divorced his daughter!?).
 
If your father has been given an eviction notice, it’s critical that you deal with this immediately – which is why I called my personal lawyer, Dr Brett Davies, and briefed him on your situation.
 
Brett’s view is that the guarantee your father gave is potentially unenforceable.
 
In other words, if your dad was conned into it by Larry (or the lawyer), then he shouldn’t lose his house.
 
(Someone should lose their home … but it shouldn’t be your dad.)
 
So, ask some hard questions, like:
 
Who was the lawyer Larry arranged, and was he independent?
 
Who paid the lawyer’s bill? (If he was acting for your dad, he is duty-bound to provide a copy of the file. Get that file.)
 
Who was present when the ‘guarantee’ was being explained?
 
Was there pressure put on your dad?
 
Was the guarantee valid? (As you correctly state, your dad got “nothing to his benefit” by signing a guarantee. Usually a bank would also require a sign-off by an accountant or financial planner, as well as a lawyer. Did he get that?)
 
So, tomorrow, call Mortgage Stress Victoria on 1800 572 292 and speak to a lawyer.
 
And never invite Larry over to dinner again.

Scott