Large debts/Person has left the country.

[stir crazy]

If they go to court, the interest is fixed at 8% by the court. The huge interest rates on CCs are suspended once it becomes a judgement debt.

I'm just curious. Is there a way to get your interest rate down to 8 % without going to court ? For example if you tell them you can't afford the present rate ? If not then a court judgement could be welcomed by some.

 

[Tadhgin]

There are a number of issues here.

Issue Number 1 is that most financial institutions, including credit card suppliers, make regular returns to credit bureaus. Subscribing credit institutions can view a summary of customers' previous credit records when an individual, in the future, applies for further credit. It will be quite easy for these institutions to view this person's payment (or non-repayment) patterns in the future. The phrase "impaired credit record" springs to mind as a likely future description springs to mind.

Issue Number 2 is that these financial institutions will, most likely, register judgement against the individual. The Judgement may be published in one of the appropriate gazettes, or indeed in the public press. A judgement mortgage may, in certain circumstances, be registered against the property or properties of the individual. The judgement mortgage would rank behind the primary mortgage charge, but would sit there nevertheless.

Generally, it is the primary mortgage holder that causes a property to be sold.

It is not a good idea to ignore financial institutions. This happy wanderer should establish contact immediately, and set up standing orders to service the various banks, etc.

 

[Tadhgin]

Stir Crazy asked if there is a way to get interest rates down to 8%? The interest rate is defined by the credit agreement, which is a legal document. Aside from negotiation, and unilateral cessation of payment (with potential consequences), there is little effectively the consumer can do.

Incidentally, a number of institutions now have loans with rates of less than 8%, including quite a number of Credit Unions and banks..

 

[Moral Ethos]

When a bank takes someone to court for a debt the credit agreement is terminated, hence they can't keep adding 15%+ interest. The courts have capped interest at 8%.

Also for the record a judgement mortgage can only sit for 12 years (same as a judgement) after which it drops off regardless of wether it is paid or not.