Living in UK with debt in Malta

[supergeorge]

Hi all,

 

I'm having some problems with a personal loan with HSBC Malta, and after a long search I've found this site which looks the best place to get some help.

 

Background to my problem - I lived and worked in Malta for two years, returning to the UK in 2007. I had a rather large overdraft that at the time I could afford to manage because I was earning a lot more money than I am now.

 

When I returned to the UK I had a difficult time with work and my personal life and was eventually made redundant. I always had every intention of paying the overdraft but for several years the bank made no attempt to chase me for the outstanding amount so I had it low on my priorities.

 

Earlier this year, HSBC Malta contacted me demanding full payment of the overdraft facility - stating that failure to do so would result in court action. This worried me and even though I realise that a Maltese court can only do so much to me now that I live in the UK, I wanted to avoid any ongoing problems and possible transfer of any court ruling to the UK. I have in the past worked in banking and plan to return to that occupation - so anything that has the potential to affect my credit rating is a worry, particularly a CCJ which would make me unemployable in any financial services role.

 

In March I agreed to switch the overdraft into a personal loan. I did this reluctantly - HSBC Malta did not (in my opinion) consider the affordability of the loan payments (€234 per month) and didn't ask for any income/expenditure details to assess me. However I felt that I could probably afford these monthly payments if I tightened my belt elsewhere. I've since made six monthly payments.

 

In September my wife gave birth and she is on maternity pay. The extra expense of a baby and surviving on one income now means that the monthly loan payment is impossible for me to afford and I missed my September payment. I've now received a demand for the full amount of the loan €11,564 from the bank with a warning that failure to do so will result in legal action.

 

This situation is completely stressing me out. I've tried to call HSBC Malta Retail Risk (as suggested in the letter if I want to discuss the situation) but no-one answers the phone. I want to pay this loan off but at an amount that is affordable and realistic. And I certainly don't want to start down a legal path that might ultimately destroy my credit rating.

 

Does anyone have any ideas or information that I should know about - I will keep trying to speak to someone at the bank and I intend to ask them to freeze the interest and allow me to pay €100 per month until the loan is cleared. But I am unsure what their attitude to such a proposal will be.

 

Any help will be much appreciated.

 

Thanks.

[renegadeimp]

How much is the debt? Also, is it hsbc threatening you or a silly dca?

[supergeorge]

Hi,

 

The debt is €11,564 and it is HSBC Malta themselves at the moment who are demanding full payment. Malta seems to be a little behind the times in terms of recognising debt problems - a search on their website offers no suggestion of who to speak to if having financial problems.

[unclebulgaria67]

When did you miss a payment towards this account that made it go into a default status ?

 

Have you admitted to owing this debt in writing since this missed payment ?

 

As far as you know, has any court judgement been entered against you in Malta ?

 

The relevant limitations period may come to your rescue here, meaning they could not enforce in any court.

 

Issues in Malta do not affect your UK records. Only if the debt could be enforced in a UK court, would it then be recorded, if they succeeded in gaining a UK court judgement. But it is not that straightforward for them. They may threaten, but I have not read of too many foreign debts being subject to UK court acttion. I suspect it may happen for very large debts, partcularly business related.

[supergeorge]

Hi,

 

I missed one payment - in September. I haven't written or spoken to anyone at HSBC Malta since March when I agreed to shift the overdraft into a personal loan (I did sign the loan agreement at that time).

 

I don't believe that any court judgement has been made in Malta - I think I am at the very early stages but it does say - 'in default of payment, legal action will be instituted against you without further prior notice'

 

I'm comfortable that a court ruling in Malta cannot affect my UK credit rating. My biggest fear is if the court ruling can be transferred or enforced in the UK using EU reciprocal arrangements and that this ultimately leads to a CCJ. But surely, as the original loan is not subject to the Consumer Credit Act, that this would complicate matters for the bank?

 

I have every intention of paying the amount - my best hope (I think) is to find a way to get them to agree to lower payments without stinging me so hard with interest payments that the loan capital barely reduces.

[unclebulgaria67]

What you need to do, if you can is evidence disputes that you have made. If you can look at your paperwork and perhaps raise some disputes in writing, it will help you if they ever tried taking this to court. They could go to a UK court using the European Enforcement Order (EEO) process, but if you raised a legitimate dispute, then they would be back to having to use Maltese courts before they could look to transfer to a UK court. The EEO process only appears to work, for uncontested claims.

 

Because you are no longer resident in Malta, it may be difficult for them to use a Maltese court. You would need to obtain advice from someone aware of Maltese law/court protocols.

 

With foreign debts, they can make a lot of threats, but these are not followed through with. If there were no issues of dispute, you could write to them explaining your position, make a token payment and offer further such payments. Then if this goes to court, you can evidence that you have tried dealing with the debt.

[supergeorge]

That's really useful advice - thanks

[AndyOrch]

So basically you agreed to allow them to turn a Statute Barred Overdraft into a personal loan ?

 

Andy

[gerson]

Hi,

 

The limitations for Malta are

Malta

Generally, the limitation periods are:

• 5 years for contractual claims.
  
• 2 years for tortious claims.
  

However, a variety of periods applies depending on the remedy sought.

The limitation period is triggered:

• For contractual claims, on the day on which the obligation was due.
  
• For tortious claims, on the day on which the tort occurred.
  

G