There's a price to pay despite slim pickings

EARLY last year I borrowed to purchase olive lots with Great Southern. I am committed to $750 per month for another four years (five-year term) before I am (hopefully) to see some return. With Great Southern now being wound up, I am wondering whether I should continue with my monthly payments? B.M.

I presume you invested in the Great Southern 2008 Diversified Olives Income Project and I suggest you read the product disclosure statement again, as well as the ATO's product ruling PR2008/54 and your loan contract in order to understand your legal obligations and where your money was supposed to go.

As you know, Great Southern's investment schemes were assigned to a number of separate companies. Ferrier Hodgson (FH) have been appointed administrators of Great Southern and 24 of its subsidiary companies, and also as receivers and managers to 10 of the companies. I note that Great Southern Olive Holdings Pty Ltd, Great Southern Olives Company Limited and Great Southern Olive Processing Pty Ltd are under the control of the FH administrators and not the receivership. FH have received court approval to post reports and other information on their website at www.ferrierhodgson.com, so I suggest you check there for further information.

With regard to your loan, you may have borrowed the money from Bendigo and Adelaide Bank or Great Southern Finance, who are named as potential lenders on the company's website, or a lender of your own choosing. I expect you will be required to keep paying off the loan and would find yourself in breach of contract if you don't. In May, the ABC reported that olives were still being picked and so, if you receive any income, you may even be able to continue claiming a deduction for the interest paid  but don't hold your breath.

Needs analysis important

I AM 63 and have recently sold my home for just under $1.2 million. What is the best way to invest this money? I will need to buy another property and would like to access the pension to some degree in the near future when eligible. I have about $180,000 in superannuation. What options would you suggest? M.R.

The first thing you should do is sit down with a professional and go through a needs analysis. Ideally, if you could put half into a new house or home unit and half into your super, you could plan a prosperous retirement in a few years. If single, you will not get the age pension immediately as the assets test currently cuts out at $562,000 but you could get a part pension later in life. If you have the choice of having too much money in savings to get the age pension, grab it.

British mortgage options

SOME time ago I read that mortgage payments on property in London were void with nothing more to pay once people left the country and couldn't keep up the mortgage. A relative has returned to Australia with her husband who has very spasmodic work and she can't keep up mortgage payments in London. Could you please let me know if I am correct in thinking that she will not have to pay off the mortgage and let the Government take over. J.A.

In Britain all mortgages are recourse loans, meaning that if your relative ceases payments, the property gets repossessed and, if the lender doesn't recover its loan from the subsequent sale, then it can pursue you for the difference for up to 12 years, possibly aided by financial detectives who advertise their ability to chase defaulters overseas. Your relative shouldn't cease payments without determining all her options. One way is to call the UK Debt Line in Britain on 0808 808 4000.