Battling credit union over debt repayments
Q&A: I’m up to my neck in debt. I lost my job three years ago. My big question to you is do you know anything about people taken to court by their local credit union and how they got on? Or where could I get information on it? My credit union is not very helpful.
I am married with two kids on €372 a week on the dole and I owe €50,000 to the credit union in several loans, one of which I had to get in my mother-in-law’s name on the advice of the credit union. The thing is both loans are mine, which the credit union knows.
We are expected to pay €70 a week out of our dole which we can’t afford, especially with Christmas coming up. We have to go without a lot. We went to Mabs but they were no help as the woman was too friendly with the credit union. Would you have any advice? This is just one of my debts please help.
Ms JM, email
This is an awful mess but, unfortunately, far from unique. It is a situation that is increasingly a problem for credit union customers.
Many credit unions across the State are now in very serious financial difficulty as borrowers struggle to repay loans, many because, like you, they find themselves out of work.
They are under growing pressure from regulators to get their books in order. They are also distinctly nervous about the impact of the upcoming Personal Insolvency Bill, under which some debtors may be able to walk away from debts they cannot meet, putting further pressure on credit union resources.
In this environment, some are working constructively with customers to achieve this; others, it appears, are being distinctly unreasonable. I am not sure how a credit union was extending loans of €50,000 and I am distinctly uneasy at your comment that your credit union suggested you apply for one significant loan in a relative’s name because of your existing indebtedness to it.
More fundamentally, though I am not familiar with your other financial commitments, I struggle to see how you can reasonably be expected to find €70 a week from your limited resources to meet this debt.
First up, you should ensure any correspondence with your credit union is in writing. Keep a copy of any letters or emails you send them. Keep copies of all written communications to date, together with a note of your recollection of the passage of events, complete with dates, or approximate dates, where possible.
If you do find yourself dealing by phone or in person, follow up such conversations with written confirmation of what was discussed and/or agreed.
Second, set out a comprehensive statement of affairs – what money you have coming in on one side (welfare and child benefit) – and your outgoings on the other (heating, rent/mortgage, food, clothing, medical bills, transport, insurance, repayments on this and any other debt, and any other calls on your income).
If you have not already approached the credit union to restructure your loans, do so with the statement of affairs in hand. If you cannot reach agreement, it is very important that you continue to pay what you can afford.