Irresponsible Lending - Whats Acceptable

[insomniac]

Can anyone point me in the direction of where I can find information on what the limits on unsecured lending should be for someone in my position.

 

In October 2003 I was aged 20 living at home and on an income of around £14,500 gross.

 

I held a Nationwide Credit Car with a £3000 limit.

 

I had an agreed overdraft limit of £2000 on my current account (Nationwide)

 

I had a £10,000 loan with Intelligent Finance a £5000 loan with Halifax, and a £3000 loan with Nationwide.

 

I applied for a £20,000 Nationwide Personal Loan (I did instruct them it was debt consilidation of the 3 loans) and took it out over 7 years.

 

Therefore I had the potential to get into £25,000 of debt with Nationwide alone, and Nationwide didnt even oversee the paying off of the other loans I was left to do this myself.

 

What I want to know is if anyone feels this lending to me which at the time I was grateful of could be classed as Irresponsible Lending?

 

My loan now stands around £15000 and i have another 4 and half years paying it off and im now earning less now than I was then.

 

I have thought about an IVA and that might still be an option as I just cannot seem to get anywhere will my debts.

 

Any advice would be greatfully received.

[deemacperth]

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2005/05/18/cmbank18.xml

 

 

Really hard case to prove mate and I think a change in circumstances after applying for credit doesn't affect your case.

 

Have you struggled to make repayment?

[insomniac]

Im not saying that a change in circumstances as made me not afford it.

 

I want to know if someone earning 15k a year should be lent £20k over 7 years (£300 a month repayments) and also be given a £2000 overdraft and £3000 credit card.

 

Potential £25k unsecured debt

 

I understand a mortgage would be different as its secured on the house, but the above just sounds crazy now!

[deemacperth]

I'm only trying to help here by being constructive.

 

£300 a month works out to £3600 a year. This appears to be within your earnings. What would affect that is your outgoings at the time you applied and as long as you filled in your application form correctly for outgoings.

 

If you had annual outgoings of 10 thousand for instance (random figure) and declared this on your form then I think an increase of 3 thousand would be irresponsible yes, but if your form stated you had minimal outgoings then I think you would find it hard to argue the point.

 

To quote the FSA from that article:

 

"If borrowers know that they will struggle to meet repayments, they shouldn't take out the loan in the first place"

 

The Dickerson case was highlighted as it was so absurd, because the annual payments were more than they earned.

 

The fact you have said you are going to consolidate your exisiting debts into one payment reduces the chance of you claiming they were irresponsible.

 

This is only my view of the matter though, I'm trying to look at this objectively for you and am not judging you personally. There may be other options for you to get your debt reduced and there are better people here who can point you to some good helpful websites. Heres one I recommend though

 

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1094132767,59163,

[insomniac]

Many thanks for your info,

 

I was not looking file a claim against this anyway, was more curious on if the banks had any responsibility for lending the money.

[insomniac]

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