loan closed due to delinquency

madred006

Hi all am just curious to know that if an account was closed 3 years ago due to delinquency does it still incur intrest untill it is paid off ,thanks in advance

Liam D Ferguson

Was there an agreement that the loan was written off?

Was this in Ireland?

madred006

hi ya yes in ireland and had agreement to clear loan and a letter of undertaking from solicitor was also given

Liam D Ferguson

Sorry I'm confused. What exactly happened?

You had a loan.

You couldn't meet the repayments?

You negotiated with the bank and the bank agreed to write off the loan?

Was it your solicitor or the bank's? What was the undertaking?

If a loan is completely written off by a bank, that's the end of it although that fact remains on your credit record for five years. I'm just not 100% sure that this is what's happened here.

chris85

Liam D Ferguson wrote: »

Sorry I'm confused. What exactly happened?

You had a loan.

You couldn't meet the repayments?

You negotiated with the bank and the bank agreed to write off the loan?

Was it your solicitor or the bank's? What was the undertaking?

If a loan is completely written off by a bank, that's the end of it although that fact remains on your credit record for five years. I'm just not 100% sure that this is what's happened here.

There are a few different types of write off.

One is where the bank thinks it may not recover the balance. It writes of the balance and then pursues through the courts. The write off is just a provision made for the bad loan. The person is still liable for the balance.

Another is where the bank has agreed with the customer that they will write off the balance and not pursue the customer in the future.

OP, if the solicitor gives an undertaking to clear a loan at some point in the future the solicitor would usually agree to clear the balance and any interest to date. Either way unless the bank agreed to stop interest they are entitled to continue to charge interest on it.

You need to be a little clearer as to what happened for a better answer to be given.

madred006

thanks guys i had a loan with credit union but lost my job and incurred arrears so my solicitor gave an undertaking that he would clear the loan out iof the proceeds of a case he was looking after me .So when i looked for a final statement on loan it said that loan was closed in 2010 due to delinquency,which i was sort of peeved with as they were topld they would get paid ,I felt that been referred to as a delinquent was strong armed and then they looked for intrest payments to be added.

chris85

madred006 wrote: »

thanks guys i had a loan with credit union but lost my job and incurred arrears so my solicitor gave an undertaking that he would clear the loan out iof the proceeds of a case he was looking after me .So when i looked for a final statement on loan it said that loan was closed in 2010 due to delinquency,which i was sort of peeved with as they were topld they would get paid ,I felt that been referred to as a delinquent was strong armed and then they looked for intrest payments to be added.

Ok they would still be entitled to accrue interest and any account charges or anything like that. A solicitor would normally undertake to clear an account at current balance plus any interest accrued.

In fairness if the CU agreed to hold off pursuing you for the debt based on the undertaking I think interest is a fair charge to apply.

Liam D Ferguson

When did the solicitor eventually pay off the loan, or is that still pending?

madred006

pending i think ,he felt that the term delinquent was strong armed and would eefect a credit rating ,as far i was concerned it would be paid off and that be it but he feels that his undertaking was not taken seriously

Liam D Ferguson

As far as I know, not all Credit Unions are members of the ICB who are the keepers of the credit rating system for Ireland. You can check if yours is a member here. If it's not, then your credit rating hasn't been affected.

If it is a member of the ICB, then your credit rating was probably affected as soon as you stopped making repayments.

If your credit rating is a concern, you can order a copy yourself from the ICB - see their website above.

But as chris85 said, the Credit Union were entitled to continue to charge interest on the loan until it was paid off, unless they had specifically agreed to freeze the interest.

badgerbroc11

Delinquent is an internal term used by credit unions to describe loans in arrears. Its more to do with how the software treats them than anything.

The rules of the credit union mean that a loan which hasn't received payment for more than twelve months must be written off. This does not mean that a borrowers responsibility to repay is gone. It means that the credit union can no longer treat the loan as an asset on its books.

This is what expect happened in your case. Whoever in the CU told your solicitor that your account was a delinquent doesn't understand much about credit unions and that they are owned by their members. I'd write a letter to the manager and the board of directors explaining how you felt about this