Reducing loan repayment

hermum

I took a loan last year with my bank, co-op. It was a struggle even then as I was on benefits, the repayments were almost £100 a month & I was getting around £210 fortnightly. I thought that I would be well enough to get back into work very soon & I could pay my mortgage for several months. I have recently lost £35 a week of benefit, I have to reapply & am waiting to get a support worker who will help me with it. I went to my local co-op bank branch & asked about spreading the repayment over a longer term. The adviser called the account management team who advised that this couldn't be done until I defaulted on the loan at that point I would need to complete an income-expenditure form & then I may be able to reduce the repayments. As the repayments come out of the account held with them that my £175 a fortnight benefit goes into I was also advised to close that & open another one with them. I've just read that a bank can still take their repayments from any account I hold with them. Can anyone please advise me as I don't want to default I want to repay at an amount I can afford to pay. If they still take their payments I can't afford luxuries such as food. Thank you

~Beanie~

If you can't afford to pay the normal monthly payment then you are technically in default. If you open another account with Coop then they could still take money out of your account, you need to open a basic bank account with a totally sesperate bank and get your benefits paid into that.

Rafter

hermum,

Sorry about your situation. The only situation I can see where you won't have to default is if you can prove you should never have been given the loan in the first place. Did you tell them that your only income was benefits and that you also had a mortgage? If so, they have not assessed that the loan was affordable and you may have some kind of claim.

I suggest you open a basic bank account elsewhere for your benefits - suggest barclays? Unless you can get back into work and pay both your mortgage and your loan, I cannot see any option but to default and then negotiate reduced payment with your creditors.

Good luck

R.

hermum

Thank you for the advice. They knew what & where my income was & my outgoings as they were my only bank account, I only went into the branch as my cash card wouldn't work & needed to draw some cash & was told that I could have a bank loan, one I had taken out when I was working I paid off within a year, so I guess that I looked like a good bet.
I was hoping that by doing what is always suggested, talk to your creditors before you can't make a payment, that I could come to an arrangement with them, without missing a payment, as I'm sure that I will get huge charges on top of what I already owe. This really scares me in case I end up being declared bankrupt and ultimately lose my house.

willyg78

Guys,

Sorry to jump on the bandwagon here, but was there not a thread on this site at one time stating that banks were not allowed to use benefit payments towards payment of loans, or was it penalty charges??

Rgds

William

hermum

Hi William, I think that was penalty charges, last month they took 2 weeks benefits for penalties, I was originally only going to be pence overdrawn. Seems that when you're on the way down there's no stopping you. My next task is to try & reclaim the charges.
Thank you

hermum

Just called my bank direct who have said that The Government dictate that they cannot reduce payments until you default, & they cannot accept a smaller payment each month, until after I don't pay 1 months. Charges will of course be added to it despite the fact that I was going to try & pay something. Once I default the whole amount becomes payable. Ho Hum, anyone got any ideas? I think I may have to pay them & not the mortgage this month as ultimately it seems that I'm going to lose the house anyway-& like millions of others am in neg equity. So much for talking to your creditors.

ladylumps45

hi hermum:o
sorry about your situation.i went into my bank a few months back to try and get a loan .my only income is benefits and i was told that theres no way they can use these as income therefore no loan allowed.
im really surprised they gave you a loan on benefits,it makes me think that they were wrong to do so and i think you should find out more on that.
do you think it would be better to pay your mortgage and not the loan this month as its the roof over your head as opposed to the loan?is the loan secured on your house?

mrcow

For what it's worth, I think Co-Op are spinning you a yarn.

You don't want Co-Op to default you on the loan.....if they do that....then the next step would be court. Whatever you do, keep making payments......whatever you can afford.....it that means £1, then pay them £1.

Do you owe anything else?

What you need to do is sit down and get all your paperwork together on whatever you owe and give the CCCS a call.

The number is 0800 138 1111

http://www.cccs.co.uk/

It's free, and they are brilliant at what they do.

Come back here and let us know what they've said.