Parents are in debt, and i want to help them out

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hizzy

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Hi All

This is my first time to post, I hope someone can help me out. Briefly, my parents re-mortgaged there home some years ago to help out one of my brothers, with the understanding that he would keep up the repayments.

He has not fulfilled his side of the agreement, my parents are in there 60's, neither work, they get 300 euro a week into the house from social welfare.

The repayments are around 800 euro a month, I have asked my other brothers and sister to help out, there are 9 of us, but no one is willing to help my parents out apart from me. Without going into that side of it, I have decided to help them out as best I can.

I don't have any spare funds at the moment, whenever I do, I give my dad odd jobs, I even make work for him and then pay him.

This is the low down on what is owed

150,000 over 20years, repayments are around 800 euro a month, the house is in 2 of my brothers names, one is giving my mum 40 euro a week and the other nothing, the one who gives nothing doesn't live there.

I have suggested to my parents to sell the house, its valued at 320k, but my mum won't, she has said it is all she has. I offered to buy it, but I can't afford 320k, and I would have to pay inheir' tax.

I have also suggested meeting with the bank and asking about paying interest only, but before I do that, I would be grateful for anyone's advice.

Many thanks
 
Why is the house in your brothers' names?
Why do you think you'd have to pay inheritance tax if you bought the house from your parents?
 
Did your parents put the house in your brothers' name to get the mortgage as they would have fulfilled the income requirements?
This sounds like yet another appalling case of abuse of the elderly...fair play to you for trying to help. I hope you receive some good advice here.
I do think you need professional advice from a solicitor (an independent one)
 
Hi hizzy

Welcome to Askaboutmoney. Can you clarify a few points.

You have suggested to your mother to sell the house but it is in the name of two of your brothers? If it's in their name, then it is not her house to sell.

If the house is in their name, then she could not have secured the €150,000 loan on the house.

Do you own a house yourself? What is your income? You can't buy the house from her if it's not hers to sell.

Brendan
 
Hi Nige

The house is in my brothers names because thats the only way they could remortgage the house

As for the inher' tax, my parents where going to sell the house to me for 150k, and we would set up contracts where they would live there for the rest of there days rent free. But when I went for the mortgage I was told that I would have to pay inher tax as the house was valued at 320k.
 
Hizzy, you can get up to €500k tax free from your parents during your lifetime so, presuming they haven't given you any other substantial gifts, selling the house to you for €170k undervalue would not create a tax liability.

However, the problem of them selling a house that is not in their name remains.
 
Hi Brendan

My brothers have agreed to sell the house to me, apologies if I keep saying its my mum who is selling it, its just that she is the one doing all the talking on there behalf, one is training to be a priest and the other is too stressed out about everything.

As for me, I'm self-employed and living in Cork, my parents house is in Dublin, I earn roughly about 50k a year and in the process of buying my own house with my partner, and selling my other one, I have offered the house that I am selling to my parents for the rest of there days if they sold there house in Dublin, and used the profit that they make on themselves for the rest of there days.
 
hizzy said:
Hi Brendan

My brothers have agreed to sell the house to me, apologies if I keep saying its my mum who is selling it, its just that she is the one doing all the talking on there behalf, one is training to be a priest and the other is too stressed out about everything.

As for me, I'm self-employed and living in Cork, my parents house is in Dublin, I earn roughly about 50k a year and in the process of buying my own house with my partner, and selling my other one, I have offered the house that I am selling to my parents for the rest of there days if they sold there house in Dublin, and used the profit that they make on themselves for the rest of there days.
Click to expand...

How does a trainee priest get a mortgage?
 
OK so which brother did your parents re-mortgage the house for? One that is on the deeds? What did he do with the money? Why has he made no effort to repay the loan? Did the other brother whose name is on the deeds benefit from the re-mortgage or was he just a guarantor? Were any rights of residence taken over the property when it was transferred to your brothers? Did your parents get independene legal advice?
IMO you should contact a solicitor quickly (and not necessarily the solicitor who acted for your parents in relation to the above transaction).
 
I have no advice regarding your situation.
However i just wanted to say fair play to you for taking on this problem and trying to sort out you folks. Far too many people these days take advantage of their parents.
In your case, only 1 child in 9 is willing to help out the people who reared them. That is an appalling statistic.
 
Hi

My brother wasn't a trainee priest at the time.

The brother that the house was re-mortgaged for is not the one on the deeds, I have 6 brothers, so there are 3 involved with all of this, as for the money, he used some of it so he could put a deposit down on a house with his girlfriend and kids, but he didn't repay the repayments on that house and it was repossessed by the bank.

The brothers whose name is on the deeds did not get anything from the re-mortgage. I'm not sure about the rights of residence.

And no my parents didn't get any legal advice, they were talked into this by my brother whose name isn't on the deeds, so they can't even take any legal action against him. I only found out about all of this, after it happened.

Apologies if I am not giving enough information, but its the only information I have been given by my mum.

I am not looking to make anything on this, I'm just trying to help out my parents and make sure they stop dreading the phone calls and letters coming in.
 
Hi Bosshog

Thanks anyway, 1 out of 9 of us, I know is terrible, but the others have just turned there heads the other way, said that its not there problem, which it isn't. I have even asked them all to put 50 euro a month into an account for my parents, which I have been doing for the past 2 years, some agreed, but have yet to put the money in.
 
You need independent legal advice (from a solicitor not linked to any past transactions) and taxation advice. There is expense involved but it'll be worth it. You'll need a willingness on your siblings' part to play ball however. The key thing is to legitimately avoid paying tax on the €170K.
This is where you need the professional advice and a willingness among your siblings to reverse the original transaction with the house, draw up the relevant loan notes dated back then, documenting what happened at each stage etc. You definitely need good professional advice.
Again, fair play to you...your behaviour is admirable.
Your siblings on the other hand...no comment!
 
The two brothers on the title deeds have agreed to sell but have they contributed anything towards the repayments of the mortgage? Are they agreeing to allow the sale of the family home to go ahead (as the registered owners), and the proceeds (after paying off the mortgage) to go to your parents?

Rights of Residence are well and good if there is somebody able and willing to make the repayments. As this doesn't appear to be the case are your parents happy to sell up and move if necessary?

If you have the co-operation of your siblings, a solicitor should be able to give them professional advice on how to proceed.
 
BossHog said

In your case, only 1 child in 9 is willing to help out the people who reared them. That is an appalling statistic.
Click to expand...

While I feel sorry for the parents and I admire hizzy's willingness to help, you can't make this judgement without knowing much more about the case.

The parents effectively lent money to one of their sons. The other siblings may have strongly advised against this. They may not even have been told. They should not be under any obligation to effectively be forced into lending money to their brother who may not have a responsible attitude to his debts.

Brendan
 
you are a great person for doing this.. i can't understand as i said in an earlier post how people can neglect their parents..
anyways,looks like you are in a serious situation.
do your parents realise that if any of the brothers who are on the deeds can decide to sell up and cast them out as legally they own the house ?
if you are to seek legal help can i suggest you go to a solicitor in Cork ,just so that they are detached from the scenario,it is advice you are seeking on how to sort this mess out.if the solicitor is any good you can use them later as your parents rep.
make sure and get a good family law solicitor rather than one who just does conveyancing.ask for advice and let them help you piece the story together.
best of luck with this and surely your brother training to be a priest will see the light of day and what theya re doing to your parents
 
Brendan said:
you can't make this judgement without knowing much more about the case.
Click to expand...

I wasn't making a 'judgement', i was making an observation.

How does anyone here know any more about any specific case. We only ever know what the Original Poster presents to us.
 
Reality check - the brothers on the deeds should be making more of an effort - after all they are they have benefited most - to the tune of 1/2 a house each - i.e. 160k each - with 1 making payments of only €40 per week and the other making no payments. They have even financially benefited more than the irresponsible brother who got the 150k dig out.

Is the reason the other siblings are not making an effort is because they know that they will not inherit the house as it belongs to the 2 brothers rather than their parents?

Would one way around this be to get all the siblings (except for the one who got the 150k loan) added to the house deeds and mortgage so that all are equally responsible? All will equally benefit financially as will all get a share of the house. And put a something in place guaranteeing your parents live there for life rent free.

If all 8 are on board, mortgage will be €100 per month (€25 per week - same as 1 round of drinks!) each and all should be able to afford this. All will benefit financially in the long run as will get a house valued at €320k (40k each). A net profit of €21,250 each in todays terms (as will be taking on 18.75k debt each in return for 40k). Better than any investment.

Could still be done with less than 8 if have enough earnings between them and can also tweak the deal to give some a higher or lower percentage of the ownership of the house if willing to pay more or not able to pay much.

Bet you find your siblings more interested in helping out if it turns out that they could benefit financially in the long run.
 
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