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Original poster

Unpaid loan? What happens?

16 replies

pucca · 28/03/2006 12:41

If a loan isn't paid can they apply for it to be taken directly out of your wage? Like they can with unpaid council tax?

What happens if a loan goes unpaid? does it go to court? then the court asks for a run down of outgoings, and says how much you should pay monthly?

I am asking all this for my sis-in-law.

TIA

OP posts:
winnie · 28/03/2006 12:48

pucca, an unpaid loan cannot be repaid direct from wages in the way council tax can.

Is the loan secured (on a house for instance) ?

Your sil needs to seek advice and possibly gets some help negotiating repayments depending on her circs. Go to CAB. If ignored it will end up in court, it is adding extra costs all the time too. It could, eventually, if a court order were ignored end up in the hands of bailiffs.

As with all debt situations it needs to be dealt with.

HTH :)

starlover · 28/03/2006 12:50

if she doesn't pay her loan the loan company will send bailiffs round.
she will then be charged not only the outstanding amount on the loan but also the fee for the bailiffs (often hundreds of pounds)

if she doesn't pay then eventually they will seize goods

Original poster
pucca · 28/03/2006 12:53

Thanks for answering, i haven't a clue so didn't have any advice etc for her.

No she rents so is a unsecured loan, she has contacted the loan company and they are no help at all, her income has gone down dramaticly and she just simply cannot afford the payment on the loan, but the company are not willing discuss anything to rectify the problem.

OP posts:
Freckle · 28/03/2006 12:53

The loan company cannot send the bailiffs round until they have a county court judgement. So the first thing will be lots of nasty letters designed to get your sil to pay up. Then a county court summons. If she has no defence (i.e. she owes the money), then she will have the opportunity to give a run down of her outgoings and income and to make an offer. If the court sees that she genuinely cannot pay more than she offers, she will be ordered to pay that amount. However, she will have a judgement against her and this will affect her future credit rating. Also, the first time she fails to make one of the payments she has offered, the judgement can be enforced immediately in a number of ways, through bailiffs, an attachment of earnings order (where money is taken directly from wages) or a charging order (charge taken on property if property owned by debtor).

winnie · 28/03/2006 12:56

pucca, if the creditors will not negotiate with sil she should definitely contact a third party agency to negotiate for her. (Like CAB)

Original poster
pucca · 28/03/2006 12:57

The thing she is most concerned about is if they can take the money directly out of wages, as if they did she couldn't pay her rent Sad she said she will cope with it if it goes to court, she knows it will add more money on though.

OP posts:
Freckle · 28/03/2006 12:59

What did she use the loan for? Is there something she could sell to reduce the total amount outstanding?

Original poster
pucca · 28/03/2006 12:59

With the court and the outgoings thing, if the court can see she could say only afford £5 or £10 a week, literally would they accept that?

Sorry for all the questions, she is just so down and needs to know.

OP posts:
Original poster
pucca · 28/03/2006 13:00

Freckle...She rents privately and it was used for her bond and deposit, thanks for replying.

OP posts:
Freckle · 28/03/2006 13:02

Can she do anything to increase her income? Take a lodger, do an evening job? Does anyone owe her any money that she could chase? Has she looked at her outgoings to see if there is anyway to reduce them?

winnie · 28/03/2006 13:02

I think it will look better for your sil if she has been seen to have tried to resolve the situation.

The court should look at her outgoing s & income and accept a realistic offer BUT they may query certain elements of an income and expenditure sheet. It will be about priorities.

Eve2005 · 28/03/2006 13:03

tell her whatever she does not to ignore the situation, frind of ours stopped paying a car loan when his car was joyridden and wrecked. he tried to ignore the situation, didn't turn up for court, was arrested, paid 4grand bail which he borrowed from a loan shark, still didn't repay loan and now has another warrent out for his arrest! yes i know he's an idiot, we tell him all the time!

Original poster
pucca · 28/03/2006 13:04

Ok thanks for all the help everyone, Smile

OP posts:
Original poster
pucca · 28/03/2006 13:05

Can you be arrested for not paying a loan then? Shock

OP posts:
heavenis · 28/03/2006 13:07

It she does not pay the loan they have to send a letter of default.

If it still goes unpaid then it will usually be sent to dept collection department, who will be in postition to accept reduced payments. She will have to provide income and expenditure.

How large is the debt if you don't mind me asking and does she have any other debts.

A company do not send out bailiffs in the first instance.

Have a look on National Debt line web site they give example letters you can send to creditors. Get in touvh with CAB as well.

Tortington · 28/03/2006 13:40

she NEEDS TO GO TO THE CAB

do an income and expenditure form then the CAB have a standardised letter infomring loan company that this is all your sis can afford to pay at the moment and give them a copy of the income and expenditure forms.

meanwhile instead of ignoring it - she should continue to pay something as a good will gesture.

she needs to go to CAB - why add on £80 court costs if you dont have to?

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