Sunday 25 August 2019

Businessmen crippled by debt put on 'veneer of wonderfulness'

Former high fliers are struggling with the psychological impact of financial fall from grace, writes Niamh Horan

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Niamh Horan

Niamh Horan

The secret misery of thousands of older and formerly wealthy self-employed businessmen who are putting on a "veneer of wonderfulness" to the outside world has been laid bare by Ross Maguire, founder of New Beginning.

The barrister and debt adviser said the men often end up in tears in the privacy of his office, while keeping the full extent of their financial struggles from their wives, family and friends.

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Speaking to the Sunday Independent, Mr Maguire said: "This group is typical of the older guy, around 65, and he has a house in a very nice part of Dublin, worth around a million and a big mortgage, also worth about a million.

"The crash happened over 10 years ago so this group of people would have borrowed when they were in their fifties and cock-a-hoop at the top of the Celtic Tiger.

"Suddenly, the rug has been pulled from under them and 10 years have passed and they are at retirement age and they haven't got time to pay the money back.

"It's mainly men and their identity is tied up with it and they feel that they have failed as a provider and sometimes they are not telling their wives about it or else their other halves just don't know how bad the situation really is."

Mr Maguire said that when dealing with such men "there are tears but there's also anger".

"I am just thinking of one guy and he is symptomatic of this group. He had a dream and 15 years ago he was wealthy and he was going to retire and by now he should be completely out of debt and living the life - then it all collapsed.

"His whole view of himself has collapsed and yet he is managing for all the world to put on a strong face."

He said this group of men can continue to fund their social life, but their monthly income will do little to chip away at their debt.

"Remember you might think they shouldn't be doing any of that because they are not paying their mortgage but €1,000 a month gets you a fair few lunches and it enables you to keep up an appearance, whereas €1,000 a month on a mortgage is generally meaningless.

"They can sell their house and clear the debt but then they have nowhere to live.

"These cases are really hard to know how to deal with and they are quite common," he added.

Mr Maguire said these cases would benefit from funds with 'patient capital' acquiring the loans.

"This is where a person can be given a long-term interest-only loan to make the repayments affordable but then they won't be able to hand over the house to their children in their will. But at least they will have somewhere to live."

Ronan Duffy, of McCambridge Duffy, a Personal Insolvency Practitioner, is also seeing cases of older, formerly wealthy businessmen who do not want to downsize because "psychologically for individuals like this, it's a bridge too far".

In many cases, he said, the spouse will not have been informed.

"There is research that has been carried out in other jurisdictions that shows 90-95pc of bankrupts are divorced or separated. So it has a massive impact," Mr Duffy said.

He described one case where, after coming to the end of discussing a man's finances his wife asked: "So do you think I should divorce him?"

"I'm thinking, he is sitting right next to you," added Mr Duffy.

After another case, a client assured Mr Duffy that his spouse knew the full extent of his financial struggles - but the woman later discovered the full truth and changed all the locks on the couple's home. Since then Mr Duffy insists on calling in the spouse for a full and frank discussion.

Human nature being what it is, he said he often has to address the issue of love.

"I have to say straight out I appreciate there are difficulties as a result of your financial stress.

"However, without sounding too trite I tell them that they can focus on rekindling the love once there is a solution in place."

Sunday Independent

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