Help - personal loan & financial hardship

Goldilocks663

Hi - I just wanted some advice really as I’ve never been in this position before.
So I’ve had a personal loan for a few years now, there’s around £7,700 remaining and in approximately May 2024 my loan repayments were reduced due to me only working part time following having a baby. This was reassessed again in November 2024 and the repayments were reduced even further for another 6 months until May 2025. I advised that I will be going back into full time work in February 2025 so I will be able to contact to go back to the original payments.

This weekend I received a ‘final demand’ letter saying I basically needed to pay off the £7,700 in full by 28th January else it’ll be passed to the repayments team and a risk of my account being closed. I spoke to a lady in branch 2 weeks ago who advised me that the bank can just extend my loan term to repay what may be owed and not to worry too much. I called immediately following the letter and advised that the previous caller in November/lady in branch told me to ignore any letters that come in about arrears as I have an agreement in place, not to worry and asked if they can extend my term. They firmly told me this cannot happen and apologised for the misinformation. They said this will be passed to the repayments team to discuss my repayment of the arrears owed, which I believe is about £1500, and there’s nothing else they can do. They said the repayments team honour the current repayment plan I have with them and then see what the best solution is.

My question is - what can happen through the repayment team? Can they close my accounts off? Get legal teams involved? I suffer from some mental health issues following having my baby (which the bank also know), so I’m panicking here. I’ve never missed payments, just had to have it lowered for the last 9 months due to fewer hours at work. Just looking for some advice really.

Thank you.

ManyWays

When you talk to the repayments team, remind them that you have had mental health problems and ask for an affordable payment arrangement going forward. A bank isnt going to rush to sue you if you are talking to them and saying you can increase what you are paying.
You need to think about what is actually affordable, if you have other debts as well it would be better to post on the Debt Free Wannabee board (https://forums.moneysavingexpert.com/categories/debt-free-wannabe) and look at them all, rather than just think about this loan, however large. 

Goldilocks663

ManyWays said:

When you talk to the repayments team, remind them that you have had mental health problems and ask for an affordable payment arrangement going forward. A bank isnt going to rush to sue you if you are talking to them and saying you can increase what you are paying.
You need to think about what is actually affordable, if you have other debts as well it would be better to post on the Debt Free Wannabee board (https://forums.moneysavingexpert.com/categories/debt-free-wannabe) and look at them all, rather than just think about this loan, however large. 

I luckily have no other debts at all - always been very good with my money it was just circumstances due to having a baby/being out of work for longer than expected that changed things. Thank you for the advice.