Irresponsible lending help!

ian1231

Hi, first let me start by saying I fully understand I took out these loans and I intend to pay them all back...However

some context, around may last year my debt had risen to between 20-25k (can't remember the exact figure off the top of my head) covid had put my partner at the time essentially out of work (because of the contract they were getting around £60 a week via furlough down from £200 from usual working) I was struggling with it all/avoiding things and in this moment of mental struggle I took out a 12k loan(the most I could get) from "Company A" for "debt consolidation" thinking this would help. long story short it didn't help and the credit cards started to fill back up
Fast forward to October and things are getting worse financially and mentally so I take out another "debt consolidation" loan from "Company B" for £5500, same as last time clear the cards and try manage.

As of the time of writing my debt is basically the exact same, fortunately my mental state is a hell of a lot better (for anyone like me who thinks reaching out to people won't help it really does) and my salary has increased to a point where with some help from friends and family I can pretty much make all my payments on time and feed myself without the need for anything like a DMP or more borrowing

My question is do I have a case? At the time my pre tax salary was 25.5k, I don't remember giving them any detail in regards to a breakdown of my incoming/outgoing just my annual salary. I feel had they done a proper look into my situation at the time I would never in a million years been given those loans

peteuk

Without being too blunt… NO! I don’t believe so, but what’s the worst that can happen they say no.

But I’m no expert, consolidation loans do not work unless you tackle the cause of the debt.  At the time of taking both loans you would have signed an agreement stating they are affordable, so unless there has been a change in circumstance then you would still be expected to be able to afford them.

When giving out a loan they don’t tend to ask for income v expenditure, yes they will need income and may generally ask about other debts but if you’ve told them you’ve  got 3 CC but I’m paying them off they wont need to know how much per month your paying. 

Obviously the increase in the COL does change things, but still at the time you asked for the loans,  You agreed the repayments, you stated they were for consolidation so if you used the loans to pay off the CC and you have since ran up more debt with said CC then that’s is not the lenders issue. 

Very easy for me to say this I know however I’ve been in the same position.  Sometimes the lender will ensure the CC or debt is paid off, but it is then up to you to close the account.   Keeping it open for emergency can lead to oh but its £50 here, there and then its a debt again. 

Help from friends and family is wonderful but at some point it may stop or they may want it back, so shouldn’t be relied upon. 

DMP doesn’t always suit everyone…

Good luck!

sourcrates

Classic case of why consolidation loans suck basically.

The creditor was not going to be aware of your mental state when they approved your loan, not unless you told them, which I assume you didn`t do ?

There are some reasons to apportion partial blame on certain payday lenders for irresponsible lending, mainly the downward spiral of debt such loans get you into, and the massive amount of interest they accrue, but what amounts to a personal loan, over a longer period of time, can never really fit into the "irresponsible lending category", as you have the full protection of the consumer credit act behind you, cooling off period etc.

You can by all means make a complaint, but you cannot hold a creditor to blame for things they were not aware of, or the results of your bad decision making, if that were the case, my favourite southern fried chicken establishment would be inundated with lawsuits.

Your story is, Unfortunatly, a common one on these forums.

ian1231

Hi,

Thanks for the advice from both, my question is just to understand how these things work, unfortunately from the few threads I looked at on here of similar topics it just seemed people didn't want to take responsibility for the debt so thought may as well ask myself, which as I've said I fully understand these are all my responsibility and fully intend on repaying them back. I'll obviously still chance my arm but won't expect anything.

If anyone happens to stumble onto this thread in the same boat as me, Go and speak to someone and get help. Your debts won't go away but you will start to feel a sense of control again!

Rob5342

I've made successful complaints about payday loans I had, most of which I took to the financial ombudsman service as the lender rejected them. Even with those, the first few loans were deemed affordable, it was only when I'd taken something like 5 in a row that the FOS said the lender should have become aware of a problem.

EssexHebridean

There is I believe some precedent for payday loan companies being successfully challenged over irresponsible lending, but these sound more like mainstream financial institutions involved here?  

Regardless of what you decide to do about that aspect - your first step right now is to put together your SOA and make a plan for getting the debt as it stands paid off. There's a link to the SOA calculator in my signature below - it needs to be completed with as much detail, openness and honesty as possible - there's not sense in making it into a picture of how you'd like things to be, or what you think you "should" be doing - make it reflect how things are right now and then the only way from there is up!