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Thousands of farm families in danger of losing homes

FARMERS at the National Ploughing Championships were yesterday warned they risk losing their homes and livelihoods because of excessive security demanded to guarantee bank loans.

Changes in the security for loans required by banks means farmers could find themselves vulnerable to losing their most valuable assets.

Commercial law specialist with Malcomson Law Solicitors, Cathy Power, made the claim at the three-day agricultural event.

Ms Power said she could not identify individual cases for confidentiality reasons. But she insisted it was a serious issue for thousands of farm families.

Guarantees

She said that in one recent case a farmer seeking bridging finance of €80,000 was asked to provide guarantees including his family home, farm buildings and 60 acres of land, meaning the whole lot was at risk if he defaulted by a small amount.

With changes to the system of guaranteeing bank loans involving a move to e-conveyancing, thousands of farmers will be asked to sign new guarantee documentation.

Ms Power said this made it important for farmers to separate their assets into different legal folios, keeping the home, farmyard and best quality land as separate entities. This means all of their assets would not be at risk if they got into financial difficulty, she said.

"There are going to be foreclosures, and the message has to be: make sure you are not at risk of losing everything, so think like a business and protect your core assets," Ms Power said during a series of seminars on new legal issues for farmers arising from the property crash and the fallout from NAMA.

The Irish Farmers Association said the main threat of foreclosure arises from current cash flow problems not being dealt with rather than legal changes. IFA Chairman of Farm Business, James Kane, said it was vital that farmers negotiated with their lenders immediately to protect their farms.

"My key message is if you've got a problem, face it and go in and tell the bank, because otherwise you'll lose your credit rating and then you won't have a hope of sorting it out," he said.

Around 150,000 people are expected to attend over the three days of live music, fashion shows, cookery stalls and machinery demonstrations.

The event will also see 300 competitors battle it out in 17 ploughing finals with classes ranging from vintage trailers to a senior horse category.

- Aideen Sheehan

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