An all too common problem seen by some community legal centres is that of vulnerable – often elderly – people who have been coerced into signing up as co-borrowers or guarantors for loans for their children or other relatives.
Lenders usually benefit financially from the agreements. The lender decides that the borrower is a high risk – and isn’t prepared to take the risk of providing the loan. However, in these circumstances the lender is prepared to see a parent to take the financial risk – often by mortgaging their home. Some of these loans are business loans, and the risk of failure is high. The consequences of failure are that the guarantor or co-borrower will probably lose their home.
Caxton CLC has a specialist elder peoples legal clinic, as well as a specialist credit practice. It is therefore no surprise that these types of problems come to Caxton. Bridget Burton, the credit lawyer from Caxton, says that the centre receives so many requests for help in these types of cases, they are unable to help everyone who seeks help.
Judge Kingham recognised “critical work done by community legal centres” in a recent case where Caxton CLC represented two guarantors.
I’m not aware of the details, and my comments above may not apply in the case heard by the Judge. However, the guarantors had taken many years to purchase their house from the Housing Commission. Their home, adapted to the meet the special needs of the fourth defendant and their disabled son, is no longer at risk of sale.
Judge Kingham said: “The guarantors are not in a position to pay for legal advice. They have been most ably and generously assisted by experienced and capable professionals. This case is an exemplar of the critical work done by community legal centres and by the solicitors and barristers who offer assistance to those who cannot afford their services.”
By Carolyn Bond