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10 year old debt blocking a loan application

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  • 07-10-2019 10:59am
    #1
    wezg
    Registered Users Posts: 22 ✭


    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.


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Comments

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    #2
    gwalk
    Closed Accounts Posts: 1,107 ✭✭✭gwalk


    would you not just pay what you owe?


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    #3
    wezg
    Registered Users Posts: 22 ✭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.


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    #4
    gwalk
    Closed Accounts Posts: 1,107 ✭✭✭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?


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    #5
    Homer
    Registered Users Posts: 4,259 ✭✭✭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???


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    #6
    myshirt
    Registered Users Posts: 5,245 ✭✭✭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.


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    #7
    ted1
    Registered Users Posts: 23,259 ✭✭✭✭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


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    #8
    Jim2007
    Moderators, Business & Finance Moderators Posts: 9,988 Mod ✭✭✭✭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.


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    #9
    US2
    Registered Users Posts: 2,651 ✭✭✭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.


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    #10
    wezg
    Registered Users Posts: 22 ✭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.


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    #11
    gwalk
    Closed Accounts Posts: 1,107 ✭✭✭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


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    #12
    US2
    Registered Users Posts: 2,651 ✭✭✭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


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    #13
    Car99
    Registered Users Posts: 2,530 ✭✭✭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.


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    #14
    wezg
    Registered Users Posts: 22 ✭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.


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    #15
    gwalk
    Closed Accounts Posts: 1,107 ✭✭✭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


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    #16
    US2
    Registered Users Posts: 2,651 ✭✭✭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?


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    #17
    28064212
    Registered Users Posts: 10,457 ✭✭✭✭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

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    #18
    belfe
    Registered Users Posts: 66 ✭✭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.


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    #19
    TitianGerm
    Registered Users Posts: 27,797 ✭✭✭✭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.


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    #20
    wezg
    Registered Users Posts: 22 ✭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.


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    #21
    wezg
    Registered Users Posts: 22 ✭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


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    #22
    TitianGerm
    Registered Users Posts: 27,797 ✭✭✭✭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.


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    #23
    ted1
    Registered Users Posts: 23,259 ✭✭✭✭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


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    #24
    LiamoSail
    Closed Accounts Posts: 4,294 ✭✭✭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.


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    #25
    Markcheese
    Registered Users Posts: 8,428 ✭✭✭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..

    Slava ukraini 🇺🇦



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    #26
    Homer
    Registered Users Posts: 4,259 ✭✭✭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!!


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    #27
    Static M.e.
    Registered Users Posts: 3,087 ✭✭✭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.


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    #28
    Force Carrier
    Closed Accounts Posts: 594 ✭✭✭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.


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    #29
    El Tarangu
    Registered Users Posts: 1,615 ✭✭✭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.


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    #30
    DellyBelly
    Registered Users Posts: 2,858 ✭✭✭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?


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    #31
    cruizer101
    Registered Users Posts: 3,205 ✭✭✭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.


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