# Debt Settlement 18k personal, 5k OD & 12k Visa. Banks want to secure against my home



## JEON50 (4 Apr 2010)

In current conditions, I suppose I do not have a large debt. However I never had debt before. 

I have 18K persoanal, 5K OD and 12k on Visa. It was fine when I was healthy, but in the last year I have had a number of cardio and stroke conditions. As a S1 contributor for 13 years, I applied for Disability allowance, and after 4 months was awarded it in late 2009.

However my bank do not take medical conditions into allowance, MABS have made them an offer to extent my repayment until I am 65, while the local branch felt this was acceptable, Dublin rejected it !

As I have no mortgage on my home, and all my borowing are not secured, they want to take an interest in my home.

Question : What if I stick to my guns and make repayments on my ability to pay, can they drag me through the courts,? I have 2 Medical consultants that have strongly advised against


----------



## Brendan Burgess (4 Apr 2010)

Hi 

What is the difference between, say a 50 year old with a 35k mortgage and no other debt and a 50 year old with a home with no mortgage and 35k other debt? 

Very little, except that the person with the home is paying a lot less in interest. 

I would suggest converting the loans into a mortgage and taking advantage of the lower interest rate.


----------



## JEON50 (4 Apr 2010)

Hi Brendon,

We have explored this option, as my medical condition is not insurable with any company, a mortgage is not an option. the bank want my solicitor to agree with me a written guarantee against my debt. My solicitor and others, are stating to stay strong, as there is a new goverment scheme coming which will aduciate on each case. However stress for me is litarally a killer !


----------



## doubledeb (4 Apr 2010)

Did you take out any sort of payment protection on any of the loans?... In case of illness or redundancy?


----------



## JEON50 (4 Apr 2010)

Well, my illness is known to the bank, so diabitily or serioos illness wass not an option, as I was informed that i would be refused


----------



## doubledeb (4 Apr 2010)

Tell them sing for it so. your health is worth a lot more than any shower of debt collectors.  Write them all a letter and explain the situation to each loan company telling them how much you can afford each week, they won't like it but hey what can you do. At least if it does end up in court (which i suspect if you are paying them a small amount regularly it may not) the judge will see that you are making a serious effort under the circumstances.


----------



## Complainer (4 Apr 2010)

What is the downside for you of saying No to the bank's request to give them security on your home? I would be very, very reluctant to do this, unless it was very clearly in your best interest and didn't put your future security at risk.


----------



## doubledeb (4 Apr 2010)

I think that the banks can go to court and get a judgement on the home, so if op ever sold the house they could take what they are owed from the sale.


----------



## Brendan Burgess (5 Apr 2010)

> as my medical condition is not insurable with any company, a mortgage is  not an option



Hi Jeon

Under the Consumer Credit Act, mortgage protection is compulsory but with the following exceptions. So the bank should be able to convert the loans into a mortgage and not require you to take out insurance. 


(2) _Subsection (1)_ shall apply as  respects all housing loans except—




 ( _b_ ) loans to persons who belong to a  class of persons which would not be acceptable to an insurer, or which  would only be acceptable to an insurer at a premium significantly higher  than that payable by borrowers generally,

 ( _c_ ) loans to persons who are over 50  years of age at the time the loan is approved,


----------



## z107 (5 Apr 2010)

How will it benefit you to convert unsecured debt to debt secured on your home? Would it not be the case that you could lose your home? Of course they would like to take an interest in your home!

Mortgages may have a lower interest rate, but the risk will be huge.

I don't understand why you would agree to this.


----------



## Brendan Burgess (5 Apr 2010)

umop3p!sdn said:


> How will it benefit you to convert unsecured debt to debt secured on your home? Would it not be the case that you could lose your home? Of course they would like to take an interest in your home!
> 
> Mortgages may have a lower interest rate, but the risk will be huge.
> 
> I don't understand why you would agree to this.



The banks can get judgements for the debt and secure them on the home anyway.


----------



## number7 (5 Apr 2010)

Never ever ever allow the financial institutions a hold over your home due to unsecured borrowings. The hint is in the term unsecured. They lent you the money on an unsecured basis and they must now suffer the consequences.

The consequences are that you are no longer able to meet full repayments. You are however able to meet partial payments.

If they brazen it out and do take you to court they will be awarded installments based on your ability to pay. Do your statement of means now and base your repayment plan on that. Thats all the judge will do if you come before the courts so they may see how futile their actions are and not waste the time or money.

You could always leave the option of a mortgage on the table, let them worry about weather you qualify or not.

The one thing you defo dont have to do is worry or stress about it, what will happen will happen regardless of worry or stress.


----------



## gunnerfitzy (5 Apr 2010)

Sounds like good advice to me.


----------



## bond-007 (6 Apr 2010)

number7 said:


> Never ever ever allow the financial institutions a hold over your home due to unsecured borrowings. The hint is in the term unsecured. They lent you the money on an unsecured basis and they must now suffer the consequences.
> 
> The consequences are that you are no longer able to meet full repayments. You are however able to meet partial payments.
> 
> ...


They will still get a judgement mortgage on the house regardless once they get a judgement.


----------



## Sidetracker (6 Apr 2010)

*Jeon50*

Hi Jeon50. I agree with all that has been said. Regardless of how the debt accrued, the bank can seek a Judgement Mortgage, but you must try not to worry. I am 67, have had more judgements than wedding anniversaries, and I have faced them all down. Life is more important. I am now in a similar situation to yourself. I have 2 incurable ailments and a Contributory Pension. I would like to clear all my debts now, so I was thinking of Equity Release ! . What say you all ?


----------



## JEON50 (9 Apr 2010)

Thanks to all, I have received a letter from my bank, offering interest only payments for 6 months, and they will review it again, in light of my health. It was a very nice letter. I have to contact them next week to work out "amount that takes into account all my circunstances"


----------



## Sidetracker (9 Apr 2010)

*Jeon50*



JEON50 said:


> Thanks to all, I have received a letter from my bank, offering interest only payments for 6 months, and they will review it again, in light of my health. It was a very nice letter. I have to contact them next week to work out "amount that takes into account all my circunstances"


 
Well done JENO50. You are now in command of your affairs.


----------



## desperatedan (10 Apr 2010)

Brendan said:


> Hi Jeon
> 
> Under the Consumer Credit Act, mortgage protection is compulsory but with the following exceptions. So the bank should be able to convert the loans into a mortgage and not require you to take out insurance.
> 
> ...



AFAIK, the exemption provision is not mandatory or binding, the Bank does not have to agree.

I am open to correction on this.


----------



## bond-007 (10 Apr 2010)

> the Bank does not have to agree.


That is correct.


----------

