Bank moves in after husband moves out: A guarantee of your spouse's loan can go on hurting long after the divorce

Debbie Wheeler and her two young children are living a financial nightmare. Their home has been repossessed and she is being pursued through the courts for thousands of pounds of debts she knew nothing about.

Her ordeal is a lesson to wives of the risks of signing a personal guarantee for their husbands' business borrowings.

Debbie's husband was a property developer. In order to raise the money to buy the properties, she stood as a personal guarantor of money loaned by AIB bank (formerly known as the Allied Irish Bank).

Debbie says: 'After each property was sold, the money was repaid and the slate wiped clean. The last of these guarantees was for a sum of pounds 84,000 and was signed at our solicitor's office in August 1987.

'Meanwhile, in 1986 we had taken out a mortgage on our house with AIB. I did not think anything of it.'

In September 1988 Debbie and her husband visited the Wembley branch of AIB to inform them they were separating pending divorce and wished to be treated completely separately for financial purposes.

'We closed the joint account and opened separate ones in sole names. The following month I applied for a re-mortgage in my name to buy out my husband's share in the property.

'AIB made me an offer of pounds 150,000 subject only to confirmation of my income. No mention was made to me of any existing guarantees, debts, etc.'

Negotiations between Debbie and her husband broke down and culminated in a court case in October 1990. Debbie, meanwhile, remained a customer of AIB throughout, but no mention was made of an outstanding guarantee.

'Less than a month before the hearing, my husband, not the bank, wrote to me alerting me to the existence of a guarantee signed by me and purportedly still in effect. As a result the hearing had to be adjourned and the bank was subpoenaed to attend at a later date.

'At the subsequent hearing the bank agreed to give me all the assistance they could in sorting out the mess. The manager of the Wembley branch said he thought the guarantee may be called in. However, he was equally certain that AIB would want to discuss the whole matter with a view to reaching some form of accommodation.'

A couple of days later Debbie received a letter from AIB dated the day after the court hearing, calling in a guarantee of pounds 84,000 and demanding full payment within 10 days.

Debbie was panic-stricken and arranged a meeting with Paddy Kelly, a representative of the bank. 'Within an hour he called me back and said the matter was in the hands of solicitors and he would be unable to meet me. I then wrote two letters to him outlining the situation and pleading for a chance to discuss the matter. I never got a reply. All this time I was still a customer of AIB.'

The matrimonial proceedings transferred their former joint home to her. In August 1991 she went to live in the United States, leaving the house on the market. She kept paying the AIB mortgage, but within a month of her leaving AIB gained a repossession order for all the money it claims is due on the property.

Debbie says: 'The bank hold the house and say they want settlement of the home loan and joint account, which I am prepared to do, but I can only settle if the house is sold or remortgaged. But they are also looking to me for repayment of my husband's personal account, his business account and a joint account he has with another person. We are talking about more than pounds 120,000.

'AIB are taking the matter to court. I have no choice but to spend thousands of pounds that I don't have to defend myself in a situation not of my making.

'I have lost my home, so my children and I are camping out while we are here and have nowhere to live on our permanent return. I am up to my ears in debt and the end is nowhere in sight. If only the bank would sit and listen to me.'

Debbie understands that AIB is pursuing her husband for money that is due.

We asked AIB a long list of questions about the case and sent them Mrs Wheeler's written authority to discuss the full details with us. However, AIB said customer confidentiality prevented them commenting on this particular case.

AIB says its policy is to outline all terms and conditions at the outset of an agreement.

We did pursue one question with them: would they sit and talk to Mrs Wheeler? A spokesman for Blatchfords, AIB's lawyers, said: 'We have advised our clients to make no comment whatosoever but, in so far as your final question is concerned, if her solicitors care to put terms in writing to us on a without-prejudice basis, we shall of course consider any proposals made with our clients. If there is some scope for compromise, then no doubt a meeting can be arranged.

'However, under no circumstances will our clients litigate this matter through the medium of the Independent.'

We intend to return to the case soon to see if an amicable solution has been reached.

(Photograph omitted)