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Loan in default

  • 18-06-2015 2:41am
    #1
    StompToWork
    Registered Users, Registered Users 2 Posts: 905 ✭✭✭


    I have a current account, with a €500 overdraft, and was paying back a €20k loan until I was laid off about 18 months ago. After I was made unemployed, I got into difficulties paying off the last €1600 of the loan. Eventually, the funds ran out, and I had to overdraw my account, where it unfortunately stayed due to lack of funds coming in.

    Now, the bank have piled the overdraft and the final €900 of the loan into one sum, and passed it onto a collection agency (please don't think I am being flippant here, this happened over the course of about 6 months, during which time, I have had very little income coming in. It's not like they decided to do it on a whim one day. I just haven't been able to make payments).

    As the job hunt was going poorly, I decided to take the bull by the horns and start my own business, which I have just started in the past 5 weeks. In that time, I have had a couple of commercial clients, with good payouts, and great potential to build.

    However, because I am working with fairly big companies, I am invoicing them, or having them pay me by cheque.

    My problem now is that my bank have stopped my account, so I have no way for companies to transfer their payment to me, and I have no way to lodge the cheques that I have got.

    I rang my bank to explain that I was now coming into a position to start clearing off the balance of the loan and OD, but they simply explained that until I paid off the amount in full, they will not make my account operational.

    Notionally, I have the funds the pay off the full amount now (about half in cheques and half in pending invoices). I explained this to them, but they are having none of it. It's a total catch22. I need my account to receive the payments that I need to pay the bank back, but they will not allow me use my bank account.

    Long description, short question. Any advice?


Comments

  • #2
    PaulM1977
    Banned (with Prison Access) Posts: 210 ✭✭PaulM1977


    Have you tried opening a different account with another bank? Once done you can then pay them back with the funds that have cleared in to your new account and hopefully get past this stumbling block for you.
    All you need is an up to date utility bill and valid ID to open an account.


  • #3
    alig123aileen
    Banned (with Prison Access) Posts: 117 ✭✭alig123aileen


    Hi I have debt collection background and financial services background. I can help you.

    Write to the debt collection agency.
    Make reference generally to your offer by phone dated XX/XX/XX to replay now your circumstances have changed (don't mention how much you can repay each month). Tell them to refer the matter back to your bank immediately and advise Debt Collection agency of their reminder under Data Protection to respect the integrity and updating of your data and if you hear further from them you will report them to the Data Protection Commissioner. (Once you told them you could or might repay the debt they should have referred you back to the bank straightaway and refused to deal with you - they are outside their remit here).

    Then write to your bank. Enclose a copy of the letter sent to the debt agency. Say your circumstances have changed and you now have a regular income and am happy to meet with the bank to renegotiate payment of the outstanding amount and reasonable interest once they confirm to lifting the stop on your account within X days. Say that you expect a reasonable reduction in outstanding interest as a result of your offer and that they have 20 working days to respond to you conclusively as per financial regulator gujidelines. Tell your bank you will also take a case under Data Protection if you hear from the debt agency again. You will only deal with the bank from now on. You should also ensure if you negotiate any settlement the bank removes your data from the ICB. Good Luck and I am confident you will succeed (repay o/s amount and smaller amt of interest- no reasonable bank manager will let this case go to Ombudsman) When you write to the bank give a expiry date on your offer of a meeting to review - say 3 wks. This will focus their mind. Follow up every meeting with the bank with a letter confirming what happened. If you need any further help talk to me Im QFA qualified. Best of luck. Great to see the man on the street taking on the banks who usually haven't done their homework done at all. Go for it!


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