A woman's place is on the pavement . . .: Sue Fieldman on wives who lose homes when men fail to pay debts

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Wives who have agreed to a mortgage on the family home to secure their husbands' business bank borrowings should not be lulled into a false sense of security by the court victory of Bridget O' Brien, who saved her home from repossession by Barclays Bank this week.

Thousands of women who have signed in the past and others who have signed recently are still well and truly stuck with the deal.

The nub of Mrs O'Brien's case was that her husband had duped her into signing a second mortgage to guarantee his business debts. Mr O'Brien told his wife she was guaranteeing a pounds 60,000 loan for three weeks.

Barclays did not explain to her what the transaction was about or tell her to take independent legal advice.

In fact Mr O'Brien had guaranteed all the company's debts in return for an overdraft of pounds 135,000 which later rose to pounds 154,000.

Mrs O'Brien has already paid Barclays pounds 60,000 - the amount she thought she was securing. Barclays tried to repossess for the rest of the debt and that is where the bank came unstuck.

The court decision does not open the floodgates for every wife to try to wriggle out of a surety agreement that she has signed just because she did not understand it.

The judges said wives (or cohabitees) are bound by their obligations unless they can show their partner exercised undue influence, misrepresented the situation or otherwise committed a legal wrong.

Even then a bank can defeat a claim if it can show that it acted reasonably when the documents were signed.

Since March 1992 lenders have been bound by the Code of Banking Practice which requires them to clearly explain the guarantor's potential liability and to tell them to get independent legal advice.

And the publicity surrounding the O'Brien case has meant that banks over the last few years have been bending over backwards to be seen to be advising women.

But what of the stockpile of disputes between banks and women customers who signed some years ago? The House of Lords made it clear that every case will depend on its facts.

In fact in another case this week Maxine Pitt claimed she signed a charge by reason of her husband's influence. She lost her case. The House of Lords said there was no duty to advise her seperately. Mrs Pitt was a joint borrower with her husband on the mortgage. The transaction was for their joint benefit.

Mrs O'Brien, however, was only a surety. The guarantee by a wife of her husband's debt was not for her financial benefit.

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