What or how do i find out the consquences of defaulting on a £18000 loan?

Saz22

I just don't know where to start, both been made redundant. No income as yet as everything is getting calulated.

Loan of £425 a month and can't afford this now. Even if we get another job we won't have enough to pay this. My Partner will be taking a considerable pay cut.

What are the consquences of defaulting on the loan? I'm not sure whether other half should take the job he has been offered and still not be able to afford the loan? Are we better off not working which isn't something we want to do at all?

Can you recommend any advice websites? CCCS is one that i will look at.

Thanks

Saz

CLAPTON

How much do you owe?

You can get free advice from CCCS, Payplan, Nationaldebtline, CAB

If you default on the loan your credit record will be marked as default which will stay for 6 years and make it very difficult to get credit.

Best to write to them explaining that you have lost your job and so can no longer pay. Ask them to freeze interest and charges for 6 months to give you time to find a new job... offer to make nominal payment of £5 to show willing.

They will try to make you pay however if you can't you can't.

There is no sense in refusing work.

ILW

Is the loan secured?

Saz22

No it is a unsecured loan

nembot

Clapton is spot on,

Speak to the lender, explain your situation and see if they'll agree to reducing the payments.

Quite a bit of money, if you default and they sell the debt on to a collection agency, they'll harrass you like you wouldn't believe, reading threads on the forum.

Better try work out an arrangement.

TBeckett100

yes always talk to the lender. it is better to have an arrangement to pay then a default. an arrangement shows you face up and take action but a default shows clinical signs of head, sand and in.

AMILLIONDOLLARS

Saz22 wrote: »

No it is a unsecured loan

Do you own property? If you do, the lender can take you to court to obtain a CCJ and Charging Order, thereby turning your unsecured loan into a secured one. As the amount owed is over £5000 they have every chance in succeeding in do this. Contact them and try to come to some sort of agreement about payment, it's not guaranteed that they will accept your offer, but at least you have it on record that you tried. Keep a copy of all correspondence and put your offer in writing.

AMD

rnb_3

AMILLIONDOLLARS wrote: »

Do you own property? If you do, the lender can take you to court to obtain a CCJ and Charging Order, thereby turning your unsecured loan into a secured one. As the amount owed is over £5000 they have every chance in succeeding in do this. Contact them and try to come to some sort of agreement about payment, it's not guaranteed that they will accept your offer, but at least you have it on record that you tried. Keep a copy of all correspondence and put your offer in writing.

AMD

erm...i think thats a bit of a leap forward.
altho its a possibility they have a few hoops to jump thru first and it will take time.

hi saz,
if u get no joy with the mediation, u may have to use another route if its open to u but thats a bit down the line.
when was the loan taken out?
is it joint? does it have ppi?
do u have the original documentation regarding the loan?

if you dont pay anything, you will be receiving more documentation and letters thru the post very soon. keep ALL documents, letters, envelopes, etc and start a file.
try and get anything they say/agree to in writing.
if u default on a debt you will get an increasingly bad credit record. which in the first instance sounds horrific but if your situation continues, will become less of an issue.
if your OH can get a job, then he should in my opinion, take it. always easier to get a better job when u are in work already and paying something will undoubtedly help you now and in the future.
the CCCS are great initially but please please read thru some other sites/forums to get a wider view as some of their advice, although well intentioned, can be detrimental, should it get to the court stage (dont panic, just worst case scenario, hence keeping ALL the paperwork). i know that from experience!!!
as for websites, maybe have a look for the consumer action group to broaden your view.
hope thats helpful.

AMILLIONDOLLARS

rnb wrote: »

erm...i think thats a bit of a leap forward.
altho its a possibility they have a few hoops to jump thru first and it will take time.

It may be a leap forward but it is an ultimate consequence of defaulting on a loan. And speaking from personal experience it takes no time at all.

My husband became unemployed defaulted on a £6k loan, the bank was not willing to negotiate on a reduced payment plan, we ended up in court last month. The bank used the opportunity to make an application for a charging order. The funny thing was that in court they agreed to the initial £50 a month we asked to pay them, they just wanted the charging order to be applied as well. We were lucky our judge refused their request and applied an instalment order instead.

But with an outstanding amount of £18K the OP may not be so lucky.

here is link about CO
http://www.fool.co.uk/Get-Out-Of-Debt/guides/Charging-Orders.aspx

AMD

rnb_3

AMILLIONDOLLARS wrote: »

It may be a leap forward but it is an ultimate consequence of defaulting on a loan. And speaking from personal experience it takes no time at all.

thats true of course, but so am i and if u know what ur doing they dont always get it all their own way. many ifs n buts of course.

My husband became unemployed defaulted on a £6k loan, the bank was not willing to negotiate on a reduced payment plan, we ended up in court last month. The bank used the opportunity to make an application for a charging order. The funny thing was that in court they agreed to the initial £50 a month we asked to pay them, they just wanted the charging order to be applied as well. We were lucky our judge refused their request and applied an instalment order instead.
sorry to hear that. nice to see there are some decent DJs around then. im sure u are aware but make sure u NEVER miss a payment, especially the first one as they rarely offer their paymt details, or they will be back for that CO. and thats from personal exp as well!!

But with an outstanding amount of £18K the OP may not be so lucky.
depends on several factors of course


AMD

regards rnb

AMILLIONDOLLARS

But as you may know, lending institutions are now using this method a lot more to secure unsecured loan.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/5648461/Borrowers-face-repossession-over-unsecured-debts.html