Notice of Default

I have just received 2 x Notice of Default under Section 54 of the Consumer Credit Act 1995 from Bank of Ireland.

One is for my tern loan and the other is for my current account.

I had met with Bank of Ireland in August 2009 to inform them that I was going to be put on a three day week from September 2009 and wanted to reduce my repayments. Since that time I have been paying the term loan and credit card and have not missed a single payment.

I called them a month ago to say I need to reduce payments further as the interest only period on my mortgage is up so I guess this has triggered the default notices.

They are threatening to close my current account in 3 weeks if I do not clear the overdraft off € 2,500. What should I say to them ??

I proposed reducing payment from € 375 to € 150, the total of my loan, overdraft and credit card is now € 18,500 down from original € 24,000.

Personally I would ask them if they would consolidate all your debts (credit card, term loan and overdraft) into the mortgage. This would reduce the total interest you are paying and improve your ability to clear your debts, which would be good for them and you.

[I'm not an expert, this is just a suggestion]

Don't consolidate them into your mortgage. It makes absolutely no sense to pay off a modest (in the grand scheme of things) credit card bill, overdraft and personal loan over 30 years (or whatever your mortgage term is). You'll end up paying double when you factor in the 30 years of interest.

I think the immediate and timely positive impact of lower repayments probably outweighs the long term (and correctly pointed out) negative impact of paying a lot more in interest.

If the situation deteriorates further the OP is facing default proceedings and potentially huge bills for legal advice and court appearances, which would surely end up costing more and have devastating consequences if the proceedings led to repossession or bankruptcy for the sake of temporary cash flow problems?

Unless OP's debts are with the same lender as his mortgage, he probably doesn't have the option to consolidate them into a mortgage. It might be worth trying to add overdraft on to the personal loan, as overdraft is repayable on demand (and this is what the bank is now demanding) and the term loan is not.

It might be a good idea now to quickly open a current account at a different bank, to avoid the situation that the bank closes down the current account and OP is left with no current account facilities.

This seems odd. What happened when you called them and who did you call? Didn't they say they would consider it and revert to you by phone or offer to negotiate?

You need to call them again, or call in and make an appointment to see the manager and ask them to fully explain why they are doing this. You also need to set out your circumstances, including a detailed budget, explaining why you are requesting this reduction in payments, and why it's neccessary. If you are anxious, write out all the questions you need answers to in advance. Also ask the bank who you can appeal to, and perhaps ring MAB's to know your rights.

RIAD_BSC said:

Don't consolidate them into your mortgage. It makes absolutely no sense to pay off a modest (in the grand scheme of things) credit card bill, overdraft and personal loan over 30 years (or whatever your mortgage term is). You'll end up paying double when you factor in the 30 years of interest.

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It possibly would not make any sense to consolidate if the OP was in a position to quickly pay off the credit card and overdraft bills. However, the OP is not in a position to do that and consolidation would make sense if it avoids default (as grackal pointed out). Plus if the OP is in a position to pay off a max of x amount per month and continues to pay off that amount, the total debt will be reduced quicker, if it is consolidated than if it isn't.