Strange situation with bank loan - advice needed

[londonrabbit]

Hi

I'm new to this site and would really welcome some advice. My situation is rather complicated. I took out a loan in 1999 for a two year postgraduate course with a High Street bank, who at the time I also had a current account with. They set up a standing order to start the repayments after I finished my course. I paid them for a couple of years, and then one month my payment bounced as I didn't have enough in my current account. I then realised that they didn't seem to have noticed that the loan account was a month behind with payment, so I cancelled the standing order and waited to see what would happen. At the time I was very badly off and couldn't afford the repayments and to be honest I can't now either. The bank never noticed that I had stopped repaying the loan! They have carried on sending me statements and interest continued to be added (at a relatively low rate) but that was it. I did receive one automated letter two years ago that said they had noticed I hadn't made a payment to my account for a while - like the kind you receive if you have to fund your account to keep an overdraft. I made a small payment as I was worried but I heard nothing further.

I no longer use the current account with them and the loan has never appeared on my credit checking file. I have a copy of the credit agreement but something has clearly gone wrong in their systems. The whole thing is very odd.

Is it worth me writing to them asking for the agreement etc? Having read some of the info here, even if they don't have it, the agreement is still enforceable is that right? Sorry for the long post. I now owe them £15,000.

[PGH7447]

It depends on you, if you leave it alone they may eventually notice, if you remind them then they will notice

 

if you had not made the payment 2 years ago then it would have been statute barred by now and they could not collect on it anyway

[questioning]

Hi,

As PGH has pointed out they might notice this soon enough nd take action as they did with me.

I had a loan, I did not cancel the DD that paid the loan I just stopped servicing the account.

After this I only received letters about not paying funds into the current account, no mention of the outstanding loan repayments, I never received a default notice either. I think there were 4 months remaining to pay when I stopped using the account.

A couple of years passed, I then received a county court claim and soon discovered they had amalgamated the outstanding loan repayment with the overdraft in their claim. When I defended this claim they said that a default notice was issued.(Oh yep, course it was)

So basically they didn't bother trying to collect the outstanding loan until they issued the claim for the overdraft.

 

On your statements received since the cancelled SO is there any mention of the loan?

If you want to act on this at all it might be the best idea to do a full SAR and see what that turns up before doing anything else.

Edited June 19, 2009 by questioning

[londonrabbit]

They still send me statements for the loan account. They just don't seem to notice that I haven't paid anything on it. I thought the Limitation Act didn't apply because of the fact they are still sending statements, but in fact I have to acknowledge the debt is that right?

Thanks

[PGH7447]

you have to acknowledge the debt either by a written admission or by making a payment

[londonrabbit]

Ah ok. I've made a bit of a mistake there then. I'm tempted to leave it and see what happens, or is that a very bad idea? Only problem is, it will carry on piling on the interest, and once it hits the "limit" of what the bank seems to see as an overdraft, I may be in trouble.

[PGH7447]

Sounds like your in trouble now so another few months / years of interest wont make much difference.

 

It really is a choice of alert them now or wait, which at the end of the day only you can decide

[londonrabbit]

I reckon they will notice before the limitation period is up so I will probably write to them. I can scrape a monthly repayment together if I have to.

I still am not sure about whether a loan is unenforceable if they can't provide the loan agreement though? Some things I read say that's the case, others disagree.

thanks for your patience....

[PGH7447]

it all depends on what the agreement if there is one comprises of.

[questioning]

Hi,

Your situation is similar to mine then, I wasn't quite sure if reference to the loan was still appearing on your statements.

The loan showed on my statements too, but the bank never tried to collect it. Two years or so passed and then they lumped the OD with the loan in their court claim.

 

A good place to visit would be the legal success forum, DCA Legal Successes - The Consumer Forums

Here you can read about ways to defend the absence of an agreement along with the cases where the agreement is not enforceable.

There could also be issues with a default notice, there's shed loads of info on cag, it just takes a long while to read and understand the issues.

This is a good thread to look at too, if you haven't already....http://www.consumeractiongroup.co.uk/forum/general/103383-agreement-enforceability.html

[londonrabbit]

What was the outcome of your situation Questioning?

I think my agreement (I still have a copy) has been set out properly. What I can't get my head round is whether it matters if they can provide a proper copy of the original signed agreement or not. I really don't know what to do. And if it is timed out because of limitation issues (if I leave it as it is and don't pay any more) would my credit rating be completely messed up?

[questioning]

What was the outcome of your situation Questioning?

I think my agreement (I still have a copy) has been set out properly. What I can't get my head round is whether it matters if they can provide a proper copy of the original signed agreement or not.Yes it is that which makes all the difference, very basically, If they don't have the CCA they cannot enforce the debt in court. Not having one is a bargaining point also. I really don't know what to do.you need to read on the forum, read up about defaults and default removal too, and the need for a default notice. you will then become knowledgeable on aspects of consumer credit law etc. so that you can make your own informed decision. And if it is timed out because of limitation issues (if I leave it as it is and don't pay any more) would my credit rating be completely messed up?

 

Hi,

You really need to read the links I gave you as they will reveal loads of info. have a look at the legal forum as well as the legal successes which I linked you to.

An example, If they did not have a CCA you would then be in a position to refuse to pay anything or offer a very small amount as a full and final settlement, along with removal of any marks on your credit file, if in fact they have marked it. You said they had not marked your credit file yet.

 

The best advice I can offer is to read and read the forum, once you have knowledge you have power.

With out the knowledge you are vulnerable.

 

The outcome for me was that after a couple of years of the odd letter from bank saying please pay Overdraft and no mention ever of the loan the bank issued a court claim.

I defended and they did not respond to my defence so the claim was stayed and has been for 10ish months.

 

Hope this helps, and I hope you understand why I emphasise the need to read the forum to educate yourself with these matters.

I found the forum last year in April and at that point I didn't even know what the CCA was. I have learnt shed-loads, If I can then anyone can.

Cheers Q.x.x

Edited June 21, 2009 by questioning

[londonrabbit]

Ok, thanks a lot to both of you. I have read up a fair amount but still found it a bit confusing and also believed (wrongly as it turns out!) that my situation was unique, as most people who challenge the legality of their agreements seem to being chased for payment, whereas I have been able to bury my head a bit.

[questioning]

Hi,

If you decide to leave it and carry on as you have been you could always keep researching so that if they make a move you'll be better informed as how to deal with it.

There's no telling if they will start to collect, there are cases where they make a move just before it becomes stat barred and also cases where they try and collect even though it is stat barred. If you arm yourself with all the info then you will in a position to fight.