Media Release - Getting to the heart of sexually transmitted debt (19 March 2002)


People who are asked to guarantee the debts of someone they love are sometimes subject to intense emotional pressure and it is often solicitors who must advise them before they commit themselves to a serious financial obligation.

The NSW Law Reform Commission and the University of Sydney Faculty of Law have today released a survey which asks lawyers about their experiences in advising people who are asked to guarantee the debts of others.

The survey is designed to gather information from solicitors about their day to day operations, both when they give advice before guarantees are signed and also when loans are called in.

The experiences of solicitors are key to understanding the process of entering a guarantee because prudent lenders will require potential guarantors to seek legal advice before signing any undertakings.

Relationship debt, or "sexually transmitted debt" is a growing concern, but detailed information about who becomes a guarantor and why is scarce.

Executive Director of the Commission, Peter Hennessy, said:

"Case law suggests that emotional issues, from subtle pressures about loyalty and trust to physical violence are often central to the signing of guarantees and solicitors are often the only outsiders able to observe these pressures at close range. The input of solicitors is vital to finding out what really happens when loans are guaranteed."

"The Commission is interested in the first-hand experience of solicitors to find out if the law has a more severe impact on particular groups within the community - for example people from non-English speaking backgrounds or those living in rural or remote areas."

Detailed information provided by the survey will help the Commission to assess problems with the law and to make appropriate suggestions for reform.

The Commission is inviting solicitors with experience of guarantee situations to complete the survey. Copies may be obtained from the Commission on (02) 9228 8230 or from the Commission's website: http://www.lawlink.nsw.gov.au/lrc.

Media enquiries: Peter Hennessy, Executive Director, (02) 9228 8230.