It can be hard to know what to do when you find it difficult to keep up with loan and overdraft repayments. Whether you are having trouble keeping up with your repayments or are in serious arrears, the worst thing you can do is to ignore the problem in the hope that it might go away. It’s important to take steps to try and get back on track. But don’t worry, we’re here to help you along the way.
I’ve missed repayments on my overdraft or personal loan
If you’re struggling to repay your overdraft or loan, use our My Budget tool (or My Full Financial Picture if you’ve more than one debt) to work out how much you can afford to repay.
If you need to reach a repayment plan with your bank, contact them and agree on a realistic and affordable offer you can stick to, then start making your repayments.
If you’re unsure how to go about this, see ‘How to approach your lender’ below.
How your lender can help you
Your lender may be able to:
- Separate any overdrafts from your existing account
- Set up a new basic bank account for you
- Help you to lower your debts at an affordable rate and in line with your other debts
Your lender may also be able to help you under the BPFI MABS Protocol (pdf). This is an agreement between MABS and the Banking and Payments Federation of Ireland (BPFI).
You can ask for:
- Lower payments
- Settlement of some of your debt
This could be a solution for you if your debts have become too much to manage.
How to approach your lender
Once you have worked out how much you can afford to offer, send your lender a letter and a copy of your Financial Statement. This is a 2-page sheet that shows your income, summarises your expenditures, lists your debts and shows what you are offering to pay.
You can send a letter explaining your circumstances and making your offer.
- Use Standard letter B for non-BPFI creditors.
- Use Standard letter C to write to BPFI members.
Sending your financial statement is often an effective way of persuading your lender to accept reduced payments over a longer period of time. Be prepared to give your lender further information about your situation, such as bank statements and payslips.
Don’t agree to pay more than you can realistically afford. Any offer you make should be based on what you have left over after paying your essential commitments such as housing, food, heat, light and so on. Read more about reasonable living expenses.
We have some useful information on:
If you’re unhappy with the solution offered by the lender or you need help approaching your lender, contact MABS.
What happens if I don’t pay or contact my lender?
If you don’t repay your debts or talk to your lender, your lender can take court action to get you to pay them back.
It’s important to take steps to deal with the debt to stop your situation getting worse. You may feel under pressure and worried, don’t panic. Get in touch with us and we can help you deal with your situation.
Where do I start if I’m struggling to keep up with several debts?
If you’re finding it hard to keep up with repayments on an overdraft, bank loan and other debts, you can read more about struggling with several debts.
Need some advice and support?
If you get stuck along the way or just want some free and confidential advice and non-judgmental support contact MABS or read more about how MABS can help.
If you decide to contact MABS, it would be useful to note all your questions and have your most recent letters, emails or court documents from your creditors to hand and any credit agreements (contracts) if you can find them.
You can also arrange to email either your Full Financial Picture or Financial Statement for a MABS Adviser to look at before your appointment if you wish. But even if you don’t have this information, still make the call and MABS will help!
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