Advice needed - Defaulted on loan, have not heard back

escpj

I defaulted on a personal loan that I took for a family member's medical bill as they were without insurance. Was confident that I'd be able to pay it back but I've lost a good job over a year ago and have been taking odd jobs here and there that can barely cover household expenses.

I fallen into arrears for 6 months straight now for an amount close to £19K. I have not heard from hsbc and I'm wondering what the process is? 

I'll also need to leave the country soon to be closer to my family as things have taken a turn for the worse - will I be stopped from leaving the country? Also, can they chase me across borders for my debt?

sourcrates

No of course not, debt is a civil matter, and sometimes banks just don`t bother chasing every bad debt they have on their books, its a very common occurrence.

You may find you will get the odd letter, and in the long run, they may sell or assign this debt to a collection company, who may ramp up the collection activity somewhat.

Are you leaving the country long term/short term?

No matter, it won`t be chased, and you won`t hear any more about it once you leave.

marcia_

escpj said:

I defaulted on a personal loan that I took for a family member's medical bill as they were without insurance. Was confident that I'd be able to pay it back but I've lost a good job over a year ago and have been taking odd jobs here and there that can barely cover household expenses.

I fallen into arrears for 6 months straight now for an amount close to £19K. I have not heard from hsbc and I'm wondering what the process is? 

I'll also need to leave the country soon to be closer to my family as things have taken a turn for the worse - will I be stopped from leaving the country? Also, can they chase me across borders for my debt?

 You will not be stopped from leaving the country. Debt is a civil matter and nothing to do with the government who controls the borders 

escpj

sourcrates said:

No of course not, debt is a civil matter, and sometimes banks just don`t bother chasing every bad debt they have on their books, its a very common occurrence.

You may find you will get the odd letter, and in the long run, they may sell or assign this debt to a collection company, who may ramp up the collection activity somewhat.

Are you leaving the country long term/short term?

No matter, it won`t be chased, and you won`t hear any more about it once you leave.

I see. I'm worried they will come after me regardless of location given it's a significant amount of almost £20K I have done my calculations - the max I can afford right now is £125 a month which will take me 13 years to pay off, and that's excluding the interest.

Ideally, it's short term (until my loved one gets better) but I don't see how I can come back with a default and potentially a court judgment issued against me? 

Does anyone know if there has been cases where court judgments were enforced overseas on debts ~£20K? 

sourcrates

This gets asked quite a lot on this forum, and the answer is nearly always the same.

Although the mechanisms do exist for this to happen, dependant on the country concerned, consumer credit debts do not get chased outside UK borders, it just doesn't happen.

They won`t know where you have gone, what do they do, search the entire world???
Even if they did know which country you were in, the bureaucracy involved, not to mention the cost, legal expenses etc, would far exceed the 20k you owe them, they will just sell the debt to a debt purchasing company and write off the loss to tax, the debt collector also won`t know where you are, they will write to your last known address and try to trace you.

When that comes back as no trace, they will likely just give up, lots of people have defaults on their credit file, some have CCJ`s as well, neither will have zero impact on you entering or leaving the country.

The collection of that debt is only important to the company chasing it, no one else cares.

escpj

Very informative - thanks a lot. I'd seen some of your posts earlier but they were for amounts significantly less than mine. Hadn't thought about the legal expenses and whatnot relative to amount owed

EssexHebridean

I know it doesn’t feel this way, but in fact your £19k is fairly insignificant as far as debt is concerned. And pursuing debts once someone has left the country is expensive, so the chances of a creditor doing it for standard unsecured debt is pretty much nonexistent.  

I hope things improve for your family member. 

escpj

If you were in my case, would you offer to settle the debt with the bank? Explain my circumstance and offer to pay off 10-15% in instalments? Don't really want my credit score to be ruined if I can help it