# Defaulting on a bank loan in Ireland



## yaku2 (6 Mar 2007)

Hi. 

A solicitors in Ireland will proceed with legal action against me next week unless I pay off my bank loan of E10K.
I am living in Asia and haven`t made a payment for over 2 years. 
I was in contact with MABS before I left Ireland but they closed my file over a year ago.
I only discovered all this yesterday as I didn`t receive any of the letters.
I would like to repay the loan but I can`t.
I think I have 2 options:

1. Hide.
2. Try to arrange a repayment plan.

If I choose #1 - How long for? What if they find me?

If I try #2, I`m worried that if I can`t meet the repayment requirements (quite likely), then they will have all my details, meaning #1 would no longer be an option.

Please advise! Thank you,

yaku2


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## BrenG (6 Mar 2007)

*Re: Defaulting on a bank loan in Ireland (living in Asia)*

Assuming you have no property in Ireland the solicitor will issue proceedings against you and service will be done by post at your last known address. Again assuming that you do not contest the proceedings the courts will issue a judgement against you (this is just a court acknowledgement of the debt). Without property and given that you are living in Asia it is extremely unlikely that the matter will be progressed further by the lender.
However if you return to Ireland in the next 6 years and wish to purchase property or borrow money the lender could turn up the judgement and you will have problems borrowing plus you run the risk of the original lender recommencing proceedings. The call is yours but I would atempt to make some contact with the lender to reach a comprimise. This can be done through a 3rd party without disclosing your present location. Given the choice that they have it is likely that they will be agreeable to a settlement with you. (Even for a %tge of the amount owing). Generally a comprimise can be reached.


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## yaku2 (6 Mar 2007)

*Re: Defaulting on a bank loan in Ireland (living in Asia)*

Thanks for the quick reply. 
I`ll give them a call and, if possible, come to some arrangement. 
If not, does the 6 years begin from the court ruling or from my last payment, 2 years ago?

Thanks again,

yaku2


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## yaku2 (6 Mar 2007)

*Update*

Hi BrenG,
I contacted the solicitor - she said I would have to supply a statement of means, within 7 days, to qualify for a reduced rate repayment plan (ie less than E450 a month). This would, presumably, mean providing them with all my details.
I am waiting to hear back (by email) from the bank`s head office.
Regards,
Yaku2


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## bond-007 (7 Mar 2007)

*Re: Update*

They are not entitled to a statement of means unless they have first gotten judgment against you and are looking for an installment order. This solicitor is chancing her arm. I would be wary of suppling too much info at this stage.

Some debt collection solicitors are extremely aggressive in their pursuit of debtors and will regardless obtain judgment and then seek an installment order and eventually a committal warrant even if you are not in the country.  If there is someone at your old address to sign for registered letters this is a likely outcome as once proper service is proved a commital order would be granted. I would advise you to have the occupants at your old address refuse to sign for any registered mail for you and to return all your post to the post office.


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## yaku2 (7 Mar 2007)

Thank you Bond-007,
so: unless I sort something out with the bank (within a week), the solicitor will go ahead with the court action against me and, as I won`t be there, the judge will rule against me. 
If I don`t make the repayments after that, the solicitor will get a warrant and then an order for my arrest?
How long could I go to prison for?
Would they come looking for me?
Would I be `on the run` for the rest of my life?

Please reply, thank you,

Yaku2.


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## ClubMan (7 Mar 2007)

*Re: Defaulting on a bank loan in Ireland (living in Asia)*



BrenG said:


> However if you return to Ireland in the next 6 years ...


But won't the problem remain on the individual's _ICB _record until it is sorted out and not just for the 5 years after a judgement was secured?


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## irishpancake (7 Mar 2007)

Yaku2

How did this solicitor get in contact with you, do they know your address/phone number, etc?

I think you should carefully read BrenG's advice:



> Assuming you have no property in Ireland the solicitor will issue proceedings against you and service will be done by post at your last known address. Again assuming that you do not contest the proceedings the courts will issue a judgement against you (this is just a court acknowledgement of the debt). *Without property and given that you are living in Asia it is extremely unlikely that the matter will be progressed further by the lender.*



sorry for the emphasis, but it is important.

I think there is no question of prison or being "on the run".


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## BrenG (7 Mar 2007)

Hold on. Don't worry about the prison issue. There is no question of that. Although technically the procedure could go down htat direction the reality is that you are fully entitled to a fair hearing before the process gets that far. Forget sending in the income statement. tell the solicitor you are abroad and prepared to make an offer to commence repayments. Formerly follow this up with an offer in writing. In that instance if ever proceedings beyond judgement are issued against you this offer can be produced as evidence that you made an attempt to reach an agreement. Also advise the solicitor that you are now living abroad and that will avoid the issue of an installment order. I am a little out of date on installment proceedings but up to a couple of years ago a Court required proof from the creditors solicitor that there was income before they would issue one. Also commital orders are rare and unlikely to be issued without proof of personal service of the installment order which would not be possible in your case. Again as I mentioned I am a couple of years out of the area and things may have changed but I would be surprised if there had been any dramatic changes in the system as in most cases where the debtor could not be traced we did not proceed beyond simple judgement.


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## ClubMan (7 Mar 2007)

irishpancake said:


> I think there is no question of prison or being "on the run".


According to [broken link removed] at least two people were in prison in 2005 for non payment of debts.


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## BrenG (7 Mar 2007)

Clubman yes you are right. That is why it is advisable to reach a satisfactory settlement with the creditor (if a Bank and a member of ICB)


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## BrenG (7 Mar 2007)

People do not go to prison for non payment of debts. installment orders are Court Orders and non paymnet of installments can be regarded as a refusal to satisfy the Court requirements. Even so a debtor can go back to the Court and state that their financial circumstances have changed and get the order amount reduced. Experienced defaulters can easily twart the system which is heavily biased in favour of the individual IME.


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## irishpancake (7 Mar 2007)

ClubMan said:


> According to [broken link removed] at least two people were in prison in 2005 for non payment of debts.



Sorry, you are right Clubman.

But in the circumstances outlined by BrenG, and his/her subsequent post, I feel that if the OP attempts to make an arrangement to repay in line with their financial circumstances, there would be no question of prison.

BTW, the Seanad debate extract is very informative


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## ClubMan (7 Mar 2007)

Sorry - _Seanad _not _Dáil_!


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## yaku2 (7 Mar 2007)

Thanks everyone for the advice, I really appreciate it,

Irishpancake - someone from my old address in Ireland contacted me about the letter and I called the solicitor. The solicitor only knows what country I`m in - unless they can trace my phone calls or emails?

BrenG - I will email my possible payment plan to the solicitor.

I will call the bank`s head office after lunch...

Yaku2


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## BrenG (7 Mar 2007)

Best of luck. Let us know how things turn out.


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## irishpancake (7 Mar 2007)

perhaps you should consider setting up a free anonymous e-mail account specifically for this purpose. 

I think Gmail are now giving out accounts without needing an invitation.

Best of luck in your efforts  

BTW, Clubman, i genuinely wasn't attempting to correct you vis a vis Seanad/Dáil, I just thought that the debate was very iinformative


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## bond-007 (7 Mar 2007)

BrenG said:


> Hold on. Don't worry about the prison issue. There is no question of that. Although technically the procedure could go down htat direction the reality is that you are fully entitled to a fair hearing before the process gets that far. Forget sending in the income statement. tell the solicitor you are abroad and prepared to make an offer to commence repayments. Formerly follow this up with an offer in writing. In that instance if ever proceedings beyond judgement are issued against you this offer can be produced as evidence that you made an attempt to reach an agreement. Also advise the solicitor that you are now living abroad and that will avoid the issue of an installment order. I am a little out of date on installment proceedings but up to a couple of years ago a Court required proof from the creditors solicitor that there was income before they would issue one. Also commital orders are rare and unlikely to be issued without proof of personal service of the installment order which would not be possible in your case. Again as I mentioned I am a couple of years out of the area and things may have changed but I would be surprised if there had been any dramatic changes in the system as in most cases where the debtor could not be traced we did not proceed beyond simple judgement.


When a case gets to the installment order stage the debtor is required to furnish a statement of means to the court. If this is not done they will simply obtain a order for a high amount in the absence of the statement. Again a judge would need to be shown that proper service of the summons was done.


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## yaku2 (9 Mar 2007)

Hi everyone,

Just letting you know how I got on:
I sent an e-mail (using gmail) to the solicitor offering a small monthly repayment - no reply yet.
I eventually got through to the debt recovery dept. of the bank and they accepted a small monthly repayment with a review in 3 months.
Once again, thank you for all the good advice,
Yaku2.


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## ClubMan (9 Mar 2007)

yaku2 said:


> I sent an e-mail (using gmail) to the solicitor offering a small monthly repayment - no reply yet.


I would be surprised if they reply to such an "anonymous" email to be honest.


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## jhegarty (9 Mar 2007)

yaku2 said:


> Hi everyone,
> 
> Just letting you know how I got on:
> I sent an e-mail (using gmail) to the solicitor offering a small monthly repayment - no reply yet.
> ...




Good news... if it does end up in court now you will look far better becuase of your offer....


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## bond-007 (9 Mar 2007)

ClubMan said:


> I would be surprised if they reply to such an "anonymous" email to be honest.


It's their loss if they don't reply. The person made the offer ball is then in the banks court then.


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## CCOVICH (9 Mar 2007)

How can they reply properly to an 'anonymous' e-mail?

e.g. Dear Sirs. 

I wish to settle my loan in full for €10k.

Signed

Mr. X

Meaningless I would have thought.


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## jrewing (9 Mar 2007)

My God, what a situation to be in !

Why don't you come to an agreement with them to pay X per month, get home, and work in McDonalds if need be to pay them back and be on the right side of the law ? 

Seems to me to be the right thing to do...


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## Erith (10 Mar 2007)

Sounds like you are getting things in line yaku2. You're getting some sound advice as usual around here so don't mind the one who can't resist sticking the fork in.


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## yaku2 (21 Mar 2007)

Hi everyone, not much to report, but just to keep you posted -

I have received a couple of e-mails from the solicitor, requesting a statement of means, but I have not replied.

Following my conversation with the bank`s debt recovery department, I`m thinking I will send a similar letter, explaining my situation, to them.

I have arranged for someone to lodge the monthly repayments into my account, but finding even this temporarily small amount is difficult at the moment.

Anyway, at least I have some time...


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## BrenG (21 Mar 2007)

Reply to the solicitor telling them that you are in contact with the Bank's recovery department and give them the name of the person involved. Start the payments as agreed, by accepting these payments the Bank are in tacit agreement with the payment schedule. Write a letter to the individual you spoke to in the Bank acknowledging the repayment schedule. This will have the effect of halting the proceedings against you. Also if you have a problem with a payment in the future please contact the bank and let them know. Generally once the bank is happy that you are still in contact they will generally not take the next step to legal.


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## yaku2 (11 Jun 2007)

Hi. The 3 months are up and I`m still broke. I can`t make any repayments. 
I`ll call the bank again but the only option I have is to default on the loan, unless the bank accepts a small percentage of the debt (and I can borrow it).
BrenG - do you have any idea what kind of percentage the bank might accept?
Thank you,
Yaku2


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## ClubMan (11 Jun 2007)

yaku2 said:


> I have received a couple of e-mails from the solicitor, requesting a statement of means, but I have not replied.


Did you ever do this? If not why not?


> Following my conversation with the bank`s debt recovery department, I`m thinking I will send a similar letter, explaining my situation, to them.


 Did you do this?


> I have arranged for someone to lodge the monthly repayments into my account, but finding even this temporarily small amount is difficult at the moment.


 Was this in line with the originally agreed 3 month agreement? Did you honour this agreement? What is the outcome of the post 3 month review?


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## yaku2 (14 Jun 2007)

Hi ClubMan,
I contacted the bank directly rather than the solicitor.
They allowed me to make _token_ repayments for the last 3 months, which I made.
I also wrote to the bank`s debt recovery department explaining my situation.
I have just called the bank again and they said I have to continue making repayments, which is fair enough, but I can`t.
I realise I got myself into this mess.
Any advice?
Thank you,
yaku2.


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## Bronte (14 Jun 2007)

Not sure but I'd assume the bank wouldn't bother wasting the cost of the ink in getting proceedings started against you.  They can't even serve proceedings against you as you are out of state, address unknown, furthermore you are penniless and asset less - who would go after that?  A man of straw I believe is the correct term. 

As I understand it the banks will call your debt - bad debt - and write it off in the accounts.  

Probably if you keep paying them - even piffling amounts - they are adding exorbitant interest and penalties to it and you are not even making a dent in the loan.   

Find out the statute of limitations on debt/loans and don't have anything to do with the bank until that time is up and don't come back to Ireland either until that time is up - you keep extending it by having dealings with them.

In case I get any lectures about this advice I always pay my debts.


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## ClubMan (14 Jun 2007)

If you were making best efforts, particularly payments agreed with the lender, to servuce the loan/arrears then chances are no judge is going to throw the book at you if it came to court. Debtors will get a lot of brownie points for facing up to their responsibilities and attempting to make a best effort at dealing with them.


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## bond-007 (14 Jun 2007)

Statute of limitations for a debt is 6 years. This gets reset everytime you make a payment or write them a letter.


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## yaku2 (16 Jun 2007)

Thanks everyone. I`ll keep you posted.


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## dubchick81 (21 Jun 2010)

bond-007 said:


> Statute of limitations for a debt is 6 years. This gets reset everytime you make a payment or write them a letter.


 
Hi, Can you please explain briefly about this 'statute of limitations' ? 
If I leave the country for x amount of time, I can't be chased for payment of my loans? 
Thanks


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