10 year old debt blocking a loan application

wezg

I recently applied for a loan at my local credit union and got refused because of an unpaid overdraft I had from 10 years ago.

I was informed by my credit union that I had an outstanding debt of €580 with Bank of Ireland which would need to be sorted before I could proceed with the loan. I contacted bank of ireland and they informed me that it was an outstanding overdraft from 2009. I then remembered that I had had my account closed by the bank back then and moved to my current bank. When they closed my account they did not persue me for the debt, they did not offer me a payment plan they just closed my account.

I was on social welfare then and my payment went directly into the bank. I had no way of accessing my weekly payment for 2 weeks until I got my payment moved to my new bank. While on the phone to bank of Ireland they said that they had received 2 payments to the debt. It wasn't a payment to the debt it was my weekly payment which I had to live without.

My problem now is that I am told by BOI that I will have to pay this dept in full to have this removed from my credit history. I can't afford to pay it outright and my credit union have said that I cannot get a loan until I pay it off. They even stated that I should never of had the 10 previous loans I had with them that were all paid back in a timely manner and most were covered by shares.

My question is this:
How can this debt still be outstanding after 10 years?
After reading up on credit checks and ratings, this outstanding debt should have been removed years ago. The credit union were able to tell me that BOI had refreshed the record 3 months ago. Are they allowed to do this?
The debt that was outstanding was an unwanted overdraft that was never requested and became a nightmare as I couldn't get away from it. The constant fees made it impossible to pay off and live on my social welfare payment at the time. I was relieved when they finally closed my account as I could start fresh and requested that my new bank account have no such feature.

gwalk

would you not just pay what you owe?

wezg

gwalk wrote: »

would you not just pay what you owe?

If you read the post you would know that I have no way to do that. The bank wants the payment outright (no payment plan) and I cannot borrow to pay it off.

gwalk

wezg wrote: »

If you read the post you would know that I have no way to do that. The bank wants the payment outright (no payment plan) and I cannot borrow to pay it off.

I read the post thanks

if you cannot pay a debt back why are you trying to borrow more money?

Homer

So you can’t pay back what you say you owe.. yet you’re prepared to take out a loan with the credit union that would have repayments? But you can pay those right???

myshirt

gwalk wrote: »

I read the post thanks

if you cannot pay a debt back why are you trying to borrow more money?

Exactly.

The credit union are right here. No loan should be granted. Pay off the Bank of Ireland debt, improve the credit behaviour, and come back in a few years.

ted1

wezg wrote: »

If you read the post you would know that I have no way to do that. The bank wants the payment outright (no payment plan) and I cannot borrow to pay it off.

How will you pay back the Credit Union?

You need to save up and pay the bank back

Jim2007

wezg wrote: »

How can this debt still be outstanding after 10 years?

Because you never paid it off. Debts don't just disappear like magic. Whether or not the bank can enforce it is a different matter.

wezg wrote: »

After reading up on credit checks and ratings, this outstanding debt should have been removed years ago. The credit union were able to tell me that BOI had refreshed the record 3 months ago. Are they allowed to do this?

Yes, one assumes they consider the debt collectable and are entitled to keep it alive.

wezg wrote: »

The debt that was outstanding was an unwanted overdraft that was never requested and became a nightmare as I couldn't get away from it.

BS, nobody made you take the money and at some point you asked for an O/D, is not automatic.

In summary, there is no legal right to have your debts written off. The statute of limitation does prevent the bank from collecting a debt that has been dormant for the legal period, but in this case it looks like the bank's legal department has done their job and kept it alive. Bottom line, you need to sort this out before getting a new loan.

US2

Can afford to pay back the credit union because it's installments not lump sum.

Bank does or did give unwanted and Iunrequested overdrafts around that time, I had awful trouble getting rid of mine.

Some people so ignorant.

wezg

gwalk wrote: »

I read the post thanks

if you cannot pay a debt back why are you trying to borrow more money?

There is a difference between paying back a loan and having that amount of money as disposal. If I had that amount I would not need to borrow either. It's why people borrow money. If you have no helpful advice can I suggest you go back to talking about idiots punching each other in the head.

gwalk

US2 wrote: »

Some people so ignorant.

As ignorant as running up a debt and assuming you can weasel your way out of it?

put the violin away

US2

gwalk wrote: »

US2 wrote: »

Some people so ignorant.

As ignorant as running up a debt and assuming you can weasel your way out of it?

put the violin away

Havnt seen anyone trying to weasel out of paying it, just that can't afford to pay it in one go, I get the impression OP would pay it in installments

Car99

Your mistake was only owing 500 , if you owed 5,000,000 it would have been written off before 10 years for sure. You may have been declared bankrupt but it would have been clear by now.

wezg

Homer wrote: »

So you can’t pay back what you say you owe.. yet you’re prepared to take out a loan with the credit union that would have repayments? But you can pay those right???

I could if they offered a payment plan. Which they are unwilling to do.

gwalk

US2 wrote: »

Havnt seen anyone trying to weasel out of paying it, just that can't afford to pay it in one go, I get the impression OP would pay it in installments

has had 10 years to pay it and hasn't? :rolleyes:

why not loan OP the money yourself and set up a repayment plan

US2

gwalk wrote: »

US2 wrote: »

Havnt seen anyone trying to weasel out of paying it, just that can't afford to pay it in one go, I get the impression OP would pay it in installments

has had 10 years to pay it and hasn't? :rolleyes:

why not loan OP the money yourself and set up a repayment plan

Why on Earth would I give a complete stranger money?

28064212

wezg wrote: »

I could if they offered a payment plan. Which they are unwilling to do.

Set up your own payment plan... by paying into a savings account. At the end of the payment plan, pay off the full amount in one go

belfe

I agree that you should pay. However, I think that there is other approach.

After 6 years, you don't need to pay the debt:
https://www.citizensinformation.ie/en/money_and_tax/personal_finance/debt/glossary_of_debt_terms.html

I think that you can force the rating companies to delete your data because the debt is expired. This is only an opinion, all the links that I've found about this are from another countries and Irish legislation may be different.

TitianGerm

wezg wrote: »

I could if they offered a payment plan. Which they are unwilling to do.

If you go in and lodge €50 each week to the account the bank will take it. Then in 11 weeks time go back to the Credit Union and reapply for your loan.

wezg

US2 wrote: »

Havnt seen anyone trying to weasel out of paying it, just that can't afford to pay it in one go, I get the impression OP would pay it in installments

Correct, I had actually asked the credit union if I could get a bridging loan to pay off the bank first their response was that they could not and should not have given me a loan in the first place. This after 10 perfectly tended previous loans with them.

wezg

TitianGerm wrote: »

If you go in and lodge €50 each week to the account the bank will take it. Then in 11 weeks time go back to the Credit Union and reapply for your loan.

They closed the account 10 years ago with no way to access the account including payment in

TitianGerm

wezg wrote: »

They closed the account 10 years ago with no way to access the account including payment in

If you go to the counter the staff can apply the payment. You've three choices, do as I suggested, do as another poster suggested and save €50 a week and clear the balance in one go or lastly, ignore it and don't get your CU loan.

ted1

US2 wrote: »

Havnt seen anyone trying to weasel out of paying it, just that can't afford to pay it in one go, I get the impression OP would pay it in installments

He could pay instalments into his credit union account , then take out the money and pay the bank in a lump sum

LiamoSail

Hard to believe that there’s people out there so delusional that they think anyone would lend them money after they shafted a previous lender.

Pay your debts like a ****ing adult. If the bank don’t want a payment plan then save up and pay them.

This must be a piss take, there’s no way anyone could be this self entitled.

Markcheese

LiamoSail wrote: »

Hard to believe that there’s people out there so delusional that they think anyone would lend them money after they shafted a previous lender.

.

That happens all the time in business, usually large sums, and to be fair to the op he has 10 or so years of good credit history with the credit union ( who were originally set up to give credit to those who couldn't get it from banks),
I have zero knowledge of the banks procedures or the laws to do with credit ratings,
There's a strong chance its still on the banks books, but may not be enforceable legally.
But if its still on their system as a debt, then you still have a problem,
It may be worth contacting the banking ombudsman (fspo.ie),or citizens information to see if theres anything that can be done...
Legally you may, or may not owe the money, morally (which is what most are jumping up and down about here) that's more a personal thing... banks and their senior staff couldn't give a flying f*ck about morals , but if everyone thought like that then Where'd we be... Meh..
Best of luck
This could take a while..

Homer

LiamoSail wrote: »

Hard to believe that there’s people out there so delusional that they think anyone would lend them money after they shafted a previous lender.

Pay your debts like a ****ing adult. If the bank don’t want a payment plan then save up and pay them.

This must be a piss take, there’s no way anyone could be this self entitled.

Oh they walk amongst us for sure!!

Static M.e.

Hi wezg,

Can you use your existing shares in the Credit Union to pay off the bank loan or make a contribution towards it? That might be the best way forward. If you intend too, then contract BOI and explain that you were not aware of the loan, are willing to pay something back and if they would accept a settlement on the loan. They might offer you a reduced rate based on the above and your circumstances at the time. They absolutely don't have to offer you anything so if you can get it reduced in anyway then think of it as a bonus but you do need to pay it off otherwise you are going to run into this issue again and again...

If you have been talking about and paying loans back to the CU for the last 10 years (and there are no other issues) then you will have a good credit rating once it's cleared.

Once you have it cleared up then get a (Free) Credit Report from the Central Bank and make sure the rest of your banking history is in order.

https://www.centralcreditregister.ie/borrower-area/submit-a-request/

As others have stated, you aren't going to get much sympathy from the Bank or the CU but they may take your situation at that time into account and offer you a reduced rate based on your willingness to pay it off in one go.

Force Carrier

OP, every week, put a few quid under your mattress or in a shoe box or a piggy bank or whatever. Eventually you will have the required sum to kill the old debt. Of which you will do so. At which point the Credit Union will be impressed with your new found financial responsibility and savings discipline and will be slightly closer to considering you for a loan.

El Tarangu

wezg wrote: »

Correct, I had actually asked the credit union if I could get a bridging loan to pay off the bank first their response was that they could not and should not have given me a loan in the first place. This after 10 perfectly tended previous loans with them.

This is called 'robbing Peter to pay Paul', OP - this normally ends in tears.

DellyBelly

580 isn't that much to pay back in fairness in one go. Why don't you get a loan from a friend pay it off if you can't aford it and then add another 600 euro onto what you wanted in the first place and pay that off in installments?

cruizer101

El Tarangu wrote: »

This is called 'robbing Peter to pay Paul', OP - this normally ends in tears.

Makes sense a lot of the time also. If you can clear high interest loans with lower ones. E.g. get rid of overdraft and credit card debt by taking on a credit card loan.

return guide

wezg wrote: »

I could if they offered a payment plan. Which they are unwilling to do.

They offered you a payment plan ten years ago, that did not work out - why would they offer another one?

ted1

DellyBelly wrote: »

580 isn't that much to pay back in fairness in one go. Why don't you get a loan from a friend pay it off if you can't aford it and then add another 600 euro onto what you wanted in the first place and pay that off in installments?

That’s a bit condescending, it’s much to some people , but it’s a lot to other people.

Also he hasn’t paid the bank yet , it’s not fair to ask a friend.

Water2626262

wezg wrote: »

I recently applied for a loan at my local credit union and got refused because of an unpaid overdraft I had from 10 years ago.

I was informed by my credit union that I had an outstanding debt of €580 with Bank of Ireland which would need to be sorted before I could proceed with the loan. I contacted bank of ireland and they informed me that it was an outstanding overdraft from 2009. I then remembered that I had had my account closed by the bank back then and moved to my current bank. When they closed my account they did not persue me for the debt, they did not offer me a payment plan they just closed my account.

I was on social welfare then and my payment went directly into the bank. I had no way of accessing my weekly payment for 2 weeks until I got my payment moved to my new bank. While on the phone to bank of Ireland they said that they had received 2 payments to the debt. It wasn't a payment to the debt it was my weekly payment which I had to live without.

My problem now is that I am told by BOI that I will have to pay this dept in full to have this removed from my credit history. I can't afford to pay it outright and my credit union have said that I cannot get a loan until I pay it off. They even stated that I should never of had the 10 previous loans I had with them that were all paid back in a timely manner and most were covered by shares.

My question is this:
How can this debt still be outstanding after 10 years?
After reading up on credit checks and ratings, this outstanding debt should have been removed years ago. The credit union were able to tell me that BOI had refreshed the record 3 months ago. Are they allowed to do this?
The debt that was outstanding was an unwanted overdraft that was never requested and became a nightmare as I couldn't get away from it. The constant fees made it impossible to pay off and live on my social welfare payment at the time. I was relieved when they finally closed my account as I could start fresh and requested that my new bank account have no such feature.

Your overdraft is probably long written off. You need to tell the credit union that you had very little income at the time and you changed bank. You’ve since paid off ten loans with them no problem so you need to hammer that home.

You should run your ccr report and see what exactly it says in relation to your overdraft. It should only appear on it five years after it was last “live”. If boi wrote off the account before 2014 it shouldn’t be on it.

The only other thing I can think of is maybe you’ve been late with the credit union or they don’t like your current request and they are just looking for a reason decline you?

Water2626262

Water2626262 wrote: »

Your overdraft is probably long written off. You need to tell the credit union that you had very little income at the time and you changed bank. You’ve since paid off ten loans with them no problem so you need to hammer that home.

You should run your ccr report and see what exactly it says in relation to your overdraft. It should only appear on it five years after it was last “live”. If boi wrote off the account before 2014 it shouldn’t be on it.

The only other thing I can think of is maybe you’ve been late with the credit union or they don’t like your current request and they are just looking for a reason decline you?

I might add that this issue has only arisen for you since the new central credit register came in (which includes overdrafts). Previously they would have used ICB

If you don’t know anything about it you need to read up on it and see your rights to remove stuff etc

careless sherpa

Water2626262 wrote: »

Your overdraft is probably long written off. You need to tell the credit union that you had very little income at the time and you changed bank. You’ve since paid off ten loans with them no problem so you need to hammer that home.

You should run your ccr report and see what exactly it says in relation to your overdraft. It should only appear on it five years after it was last “live”. If boi wrote off the account before 2014 it shouldn’t be on it.

The only other thing I can think of is maybe you’ve been late with the credit union or they don’t like your current request and they are just looking for a reason decline you?

What does 'live'mean in this context. Is it when the bank would have officially closed the account?

Water2626262

careless sherpa wrote: »

What does 'live'mean in this context. Is it when the bank would have officially closed the account?

Yeah when the agreement ended. If you pay off a loan it’s on your credit history for five years after the last repayment.

Same with write offs settlements etc. Up to five years after date of write off

careless sherpa

Water2626262 wrote: »

Yeah when the agreement ended. If you pay off a loan it’s on your credit history for five years after the last repayment.

Same with write offs settlements etc. Up to five years after date of write off

So if a debt was sold on would it be five years from when the debt was sold or from the end of repayments to whoever bought it. In other words would it still be live while some money is owed.

my3cents

careless sherpa wrote: »

So if a debt was sold on would it be five years from when the debt was sold or from the end of repayments to whoever bought it. In other words would it still be live while some money is owed.

Its from the last payment or admission that you owed the money.

afaik the bank could actually be in trouble for having out of date information on the central credit register. I don't think the same black mark can be set against you for more that 5 years?

From https://www.communitycu.ie/cuweb/wp-content/uploads/Central-Credit-Register-FAQs-Web.pdf

Credit performance information, such as outstanding balance and number of payments past due
will be held on the CCR for a period of five years from when it was first submitted.

Banks can only submit the details once they can't keep updating them so the OP needs to find when the bank submitted the details and if it was more the 5 years ago then make a complaint.

my3cents

Note also

Q 28: Can I apply to have my information amended?
A: Yes. You will be able to make an application to your lender and the Central Bank of Ireland to
amend information held on the Central Credit Register about you if you believe it is incorrect. You will have a right to:
- add an explanatory statement of 200 words or less, relating to any of your
information held on the CCR, and this will be included on your credit report
- have your information amended if you believe it is inaccurate, incomplete or out of date
- make a report to the CCR if you reasonably believe that someone has, is, or is about to impersonate you.

(My use of bold text and underling)

Bob24

wezg wrote: »

I could if they offered a payment plan. Which they are unwilling to do.

They don’t have to but let’s assume they did offer you a payment plan: then you would have monthly debt repayments to serve with BOI.

You then go back to your credit union to talk about that loan from them again and what do they say: you currently already have repayment commitments towards BOI, come back once you’re done with than loan and then we can discuss another one.

At the end of the day it doesn’t do anything for anyone.

Basically the way out is: you say you’d be able to cover a payment plan if BOI was offering one. Then just save that money each month and once the savings are enough go back to BOI and repay the full amount.

rd1izb7lvpuksx

my3cents wrote: »

Its from the last payment or admission that you owed the money.

afaik the bank could actually be in trouble for having out of date information on the central credit register. I don't think the same black mark can be set against you for more that 5 years?

From https://www.communitycu.ie/cuweb/wp-content/uploads/Central-Credit-Register-FAQs-Web.pdf



Banks can only submit the details once they can't keep updating them so the OP needs to find when the bank submitted the details and if it was more the 5 years ago then make a complaint.

Banks and other institutions not only can keep the CCR up-to-date, they're legally required to.



You should read the Section 8 of the Credit Reporting Act 2013 - information about the debt will be kept on the register for five years after it has been discharged.

Markcheese

Isn't there something about if you give a token payment, (or offer payment?) on the "out of date" debt, that it's back to active again...?
How much is the debt now? 500 quid with compound interest at overdraft rates after 10 years could be fairly saucy by this stage...(To you, to the bank its peanuts)

my3cents

Markcheese wrote: »

Isn't there something about if you give a token payment, (or offer payment?) on the "out of date" debt, that it's back to active again...?
How much is the debt now? 500 quid with compound interest at overdraft rates after 10 years could be fairly saucy by this stage...(To you, to the bank its peanuts)

I don't see how a bank can close an account then charge interest on the balance?

rd1izb7lvpuksx

my3cents wrote: »

I don't see how a bank can close an account then charge interest on the balance?

It depends on the contracts, but banks in general can suspend or close accounts in arrears without absolving the account holder of the debt. There's no reason in principle why interest wouldn't accrue.

rd1izb7lvpuksx

Markcheese wrote: »

Isn't there something about if you give a token payment, (or offer payment?) on the "out of date" debt, that it's back to active again...?
How much is the debt now? 500 quid with compound interest at overdraft rates after 10 years could be fairly saucy by this stage...(To you, to the bank its peanuts)

Until it's paid off, forgiven, or otherwise discharged, debt doesn't go "out of date" on the CCR.

GerardKeating

belfe wrote: »

After 6 years, you don't need to pay the debt

That's not quite correct, after 6 years, they cannot take you to court to force one to pay the debt, but one can still pay it if one wants.

Jim2007

belfe wrote: »

I agree that you should pay. However, I think that there is other approach.

After 6 years, you don't need to pay the debt:
https://www.citizensinformation.ie/en/money_and_tax/personal_finance/debt/glossary_of_debt_terms.html

I think that you can force the rating companies to delete your data because the debt is expired. This is only an opinion, all the links that I've found about this are from another countries and Irish legislation may be different.

Rubbish, it's an active debt and therefore not subject to the statute of limitations.

my3cents

Jim2007 wrote: »

Rubbish, it's an active debt and therefore not subject to the statute of limitations.

In court a valid defense is that the debt is statute barred provided the debt has not been acknowledged or no money paid off it for a period of 6 years.

Jim2007

Water2626262 wrote: »

Your overdraft is probably long written off.

A company or a bank writes off a loan for accounting purposes, it in no way impacts your liability to pay it nor their ability to sell or seek to enforce it.

Jim2007

my3cents wrote: »

In court a valid defense is that the debt is statute barred provided the debt has not been acknowledged or no money paid off it for a period of 6 years.

It's amazing how people only get half the story, it is only valid if you can show that the lender ignored the debt and most banks I have worked for have a system to flag up such events so they don't miss it. And in this case they updated the credit records plus the OP telephoned them.