Can't cancel bank's direct debit from joint ac. - need advice on other options please.

For reasons already stated I have to reduce the amount my bank are taking on a term loan, I have asked them to do this and put the loan over a longer period of time and they have refused. I can not cancel their direct debit from our joint account as it seems locked, So will I have to move my every month transactions to another account ie wages in and monthly bill payments, Would I be better to move everything to another bank or could I just use my husbands account which is with the same bank but is only in his name, He gets payments into that account, The loan is in both our names, Can the bank start to collect the money from his sole account?

Okay, having read through your other posts, I think that a resolution can be achieved but it is going to take a thick neck from both yourself and your husband as you take unilateral action.

1) As the loan is in both names you should both open accounts with other banks.
2) Move all transactions, wages, bills etc to the other banks, except the term loan direct debit/standing order.
3) The term loan direct debit/standing order will then start to bounce. There is also a possibility that the original current account will go into an unauthorised overdraft. Either way this is okay because you have regained control of the situation.

Next steps:

1) Start upping the credit card payment. Maybe €500 per month. It will take over two years to clear the outstanding balance but if you keep paying every month you will probably get to keep the €9k credit limit (only to be used in an absolute emergency).
2) Set up a standing order to pay directly into the term loan account. Maybe €200 a month which approximates to 12% annual interest on a €21k balance.
3) When the credit card has been paid off increase the term loan payment from €200 a month to €700 a month. Eventually you will pay this off as well.
4) Also, try and save for a rainy day fund. Even €50 a month would be a start.

Implications:

1) Credit record will be affected. Don't worry about it. You don't want any more credit.
2) Legal action. There is a risk of legal action from the original bank over the term loan. While the risk is there, if you are paying them €200 / month they may not go to the expense of engaging solicitors.
3) Your house. There is a slight chance that if legal action against you is successful then a judgement might get registered against your house. All this means is that if you sell your house within the next 12 years the term loan (€21k) has to be paid out of the proceeds. You won't be evicted, so don't worry on this front.
4) The original bank will be irritated. Expect a volume of phone calls and letters. Phone calls should be ignored. Letters should be neatly filed, and then forgotten about.

Best wishes

Here is another possibility. Take out a mortgage on your house, which appears to be unencumbered. On a €35k mortgage over 10 years EBS are quoting a monthly repayment of €342.83 variable. €35k would be enough to pay off the term loan, pay off the credit card, and pay for any legal fees that might be involved. btw, EBS will entertain a mortgage application of as little as €25k.

Thank you for your reply, I need to sit down now with my Hubby and discuss the info you have given me, Regards Duffy55

I really appreciate your advice on this but I am back all ready with a question, If a legal action was taken by the bank for the 21k would that be in a public court like seen by family and friends. I just don't think I could take that pressure, I think perhaps we could afford to give them €300 a month would that stop them taking legal action? Also I have tried to reason with this bank and have had no luck, When you say ignore their calls and letters should I reply to one explaining what I am doing and tell them I intend to return to full payments in 2 years? The joint account where they take their repayment from has an overdraught 3k on it which is usually near its limit what should I do about this?
Sorry about these questions but your advise is invaluable too me at this time.

Have you spoken to MABS? They can provide very good advice.

A small remortgage may be an option and you should discuss this with a broker as to what can and cannot be achieved given your history.

I do think you have a bigger issue though which is that your finances in general seem to be a bit of a mess and you seem to have issues managing your money. There is a money makeover template which you will find on other posts on here which would be worth filling in to see what advice you can get

It might be best to put €200 a month into the term loan and €100 a month into the €3k overdraft. If it comes to legal action, which is unlikely, it wouldn't be in open court. You just tell the court in advance by writing that you are consenting to the judgement. It is a paperwork exercise. There is a small chance that the judgement would get registered in the central office of the High Court. This is unlikely, but if it happens it would become public at that stage.

Do explore the possibility of using a mortgage to pay off the term loan/overdraft/credit card. The term loan and overdraft are probably attracting an interest rate of 12%. The credit card is probably 20%. The interest on a mortgage could be as low as 3.3%. You will save a lot on interest payments by going this route.

thedaddyman said:

Have you spoken to MABS? They can provide very good advice.

A small remortgage may be an option and you should discuss this with a broker as to what can and cannot be achieved given your history.

I do think you have a bigger issue though which is that your finances in general seem to be a bit of a mess and you seem to have issues managing your money. There is a money makeover template which you will find on other posts on here which would be worth filling in to see what advice you can get

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Thanks Daddyman for your reply I don't think you read my previous reply and if you had you will see it was a failed business that caused this mess. We have done all in our power to ensure all suppliers got paid and not one person was left a cent out of pocket unlike many others who walked away and left people including us to suffer. The bank in question when we asked for longer time to pay off our debts on 3 different occasions have refused. They are insisting on us paying 30k off over 4 years, To be honest a lecture from you is so helpful and I thank you for it but please do your research before you comment. My credit history is at the moment perfect however this will not be the case soon and I am not a happy bunny at all.
Were you affected by any of the downturns in the economy like many self employed were? Managing money is easy when there is little left to manage after banks take their share.

Thank you again TLO we will sit down and chat over your advice over the weekend and take action soon. Should I reply to one letter stating I will resume payments after a period of time?

Duffy55 said:

Thanks Daddyman for your reply I don't think you read my previous reply and if you had you will see it was a failed business that caused this mess. We have done all in our power to ensure all suppliers got paid and not one person was left a cent out of pocket unlike many others who walked away and left people including us to suffer. The bank in question when we asked for longer time to pay off our debts on 3 different occasions have refused. They are insisting on us paying 30k off over 4 years, To be honest a lecture from you is so helpful and I thank you for it but please do your research before you comment. My credit history is at the moment perfect however this will not be the case soon and I am not a happy bunny at all.
Were you affected by any of the downturns in the economy like many self employed were? Managing money is easy when there is little left to manage after banks take their share.

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If any offence was taken then my apologies, it was not meant nor was it intended to be a lecture. I spend a lot of my time supporting and consulting with small businesses and start ups in a voluntary basis via my local LEO and have seen plenty of people in your position. The reality is however that you need help, you can't afford to pay back your bank loan and you would be amazed the help that is out there if you look for it. I wish you well but I do fear there is a bigger issue but you are so deep in your current problems that you are finding it difficult to step back and consider it.

In your original post, you asked can the bank take funds from your husbands sole account. Potentially yes they can, it is called Combination or the right of set off.

thedaddyman said:

If any offence was taken then my apologies, it was not meant nor was it intended to be a lecture. I spend a lot of my time supporting and consulting with small businesses and start ups in a voluntary basis via my local LEO and have seen plenty of people in your position. The reality is however that you need help, you can't afford to pay back your bank loan and you would be amazed the help that is out there if you look for it. I wish you well but I do fear there is a bigger issue but you are so deep in your current problems that you are finding it difficult to step back and consider it.

In your original post, you asked can the bank take funds from your husbands sole account. Potentially yes they can, it is called Combination or the right of set off.

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Hi Daddyman, Perhaps I am a little sensitive at the moment but I have been paying back the bank for a year and a half and now am just tired of getting no help what so ever, I am all ears when it comes to help, You reckon mabs would be the way to go for advice? I wonder what you feel is the bigger issue you keep referring to?

I would move current account immediately to a differnt bank to regain control of the situation. Cancel the DD for the loan through your new bank account ,which you should be able to do on line, then transfer the reduced amount every month to the loan account using on line banking. Tell the bank where you have the loan that you are reducing repayments to reflect what you can afford. Other than huffing and puffing the bank where you have the loan will do nothing IMO, they have far bigger problems.

Can I just update you and maybe take some more advice. We defaulted for 3 months due to loss of work .We went to see the local manager who was we thought understanding of our situation, He asked us to apply for a new loan over a longer period this was refused by his head office but he asked us to put in place "A promise to pay" of €400 per month based on a verbal promise from him that after showing an ability to pay they would issue us with a new loan over a longer period set at €400 per month, We have now reduced our cc debt as well over the past 6 months by €1200. We have now done as he asked and assumed it would be automatic that a new loan would be put in place but we have been asked again to reapply for the loan over a longer period at this stage I have no faith they will offer it to us. The whole time we have been paying the the €400 the bank have charged us a penalty interest of €40 per month on the loan. so in effect we have only being paying off €360 per month.

If it comes to legal action, which is unlikely, it wouldn't be in open court. You just tell the court in advance by writing that you are consenting to the judgement. It is a paperwork exercise. There is a small chance that the judgement would get registered in the central office of the High Court. This is unlikely, but if it happens it would become public at that stage.

Given the amount of the debt, it is more likely that it would be in the Circuit Court. Whilst you can consent to the judgement, it is still an 'open' court, in that anyone can attend and the lists are published on the courts website in advance. It would be a very rare debt case that would be heard 'in camera', that is in private.