- Can my bank close my account if I make a complaint?
The Banking Code states that a bank must provide a minimum of 30 days notice prior to closing an account. However, if a complaint is registered and found in your favour whilst the bank could threaten to close the account it would leave itself open to a claim for dealing with a complaint in an unreasonable fashion and a further complaint and potential recompense could follow.
It is always worthwhile taking a prudent approach regarding complaints against any financial institution. Prepare an escape route so that if the bank acts incorrectly your finances are not affected. Opening a second account is one step that can be taken.
- If I make a complaint about my bank can they blacklist me?
No. You can only have an adverse entry on your credit file (black mark) if you are in breach of borrowing facilities with a lender not for solely raising a complaint. This breach can include missing a loan or mortgage payment or being outside of agreed borrowing guideline. The majority of financial institutions forward a credit update on their customers and their borrowing on a regular basis to the credit reference agencies so that other financial institutions are able to make up to date credit judgements on clients.
- If I make a complaint about my mortgage company can they repossess my property?
No. However, if you use the mortgage company for borrowing on your property it is always worthwhile to be careful and take a prudent approach in dealing with a complaint. It is not that the mortgage company would repossess your home but they may in the future look at your situation should you request a further advance or if you do fall behind in your mortgage payments less than sympathetically. There are safeguards against this but it is better to be cautious and pre warned. Finding alternative financial routes are not a bad idea.
- Can I repair my credit file?
Sadly the answer is neither yes or no, it’s a matter of opinion, however the brief explanation below will assist with any understanding. Your credit file contains information in relation to the majority of your financial transactions:- Loans, Mortgages, Hire Purchase, Overdraft facilities, Utility Bills where regular payments are made for the service, etc. In addition it contains information regarding borrowing facilities where an application has been submitted and the outcome of that decision. Adverse entries are also entered where there is a default notice or an IVA or Bankruptcy order in place.
Adverse information which may present problems when applying for credit remains on your credit file for certain periods, Bankruptcy and IVA 6 years for example. These can only be removed if they do not apply to you in which case you can request their removal. Otherwise they as all entries on your credit file remain.
The exceptions which can lead to removal from a credit file is an entry belongs to a party that has no financial connection to you, where you would apply for disassociation or if the entry is incorrect in which case you can apply for it’s removal providing evidence as required.
It is always worth reviewing your credit file where you can apply for details from the following. The credit reference agencies will also answer any specific questions relating to a credit file report or entries on a credit file providing the necessary guidance and information.
Equifax – www.equifax.co.uk
Experian – www.experian.co.uk
- What is bankruptcy?
Bankruptcy is an option that often has to be considered when an individual cannot pay their debts as they fall due. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order (there is the possibility that in some cases the bankruptcy discharge period will be less than one year).
Although bankruptcy has a bad stigma and is publicly advertised, it should always be considered when dealing with individual insolvency cases.
Anyone can go bankrupt, including individual members of a partnership. There are different insolvency procedures for dealing with companies and for partnerships themselves.
How are you made bankrupt?
An individual can be made bankrupt either in one of three ways:
- Voluntarily - By the debtor themselves.
- Involuntarily - By the creditor owed money (£750 Minimum).
- The supervisor or anyone bound by an IVA
A bankruptcy order can still be made even if you refuse to acknowledge the proceedings or refuse to agree to them. You should therefore co-operate fully once the bankruptcy proceedings have begun. If you dispute the creditor’s claim, you should try and reach a settlement before the bankruptcy petition is due to be heard. Trying to do so after the bankruptcy order is made is both difficult and expensive.
What are the implications of bankruptcy?
- You lose control of your assets.
- You cannot obtain credit for over £250 without the permission from the lender.
- You cannot act as a company director.
- You cannot take any part in the promotion, formation or management of a limited company (LTD) without the permission of the court.
- You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy.
- You may not practice as a Charted Accountant / Lawyer.
- You may not act as a Justice of the peace (JP).
- You may not become an member of parliament.
- You may not become a member of the local authority.
- Your credit is affected for many years after the annulment.
- You may be publicly examined in court.
What are the advantages of bankruptcy?
- For the person involved, bankruptcy provides relative peace of mind and possible automatic discharge after one year (or less in some cases).
- For the creditors, bankruptcy allows a full investigation of the debtor's affairs to be carried out.
- What is IVA?
An Individual Voluntary Arrangement - IVA is a formal agreement between you and your creditors where you will come to an arrangement with people you owe money to, to make reduced payments towards the total amount of your debt in order to pay off a percentage of what you owe then generally after 5 years your debt is classed as settled.
Due to its formal nature, an Individual Voluntary Arrangement - IVA has to be set up by a licensed professional
Once a decision has been made that an Individual Voluntary Arrangement - IVA is right for you, you will be asked questions regarding your current financial situation. Based on the information you have given, a repayment amount will be agreed with you. Once proposals have been drawn up you will need to check and sign these and return them to your IP.
An application may then be made to the court for an Interim Order. Once this is in place, no creditors will be able to take legal action against you. A creditor meeting will be arranged to which you should attend.
The Individual Voluntary Arrangement - IVA will be legally binding. As long as you keep up the repayments, when the term of your agreement is finished, you will be free from these debts regardless of how much has been paid off.
During the period of your arrangement your financial situation will be reviewed regularly to see if there has been any change in your circumstances.
It is very important that consumers do not confuse an Individual Voluntary Arrangement - IVA with a Debt Management Plan, which are not legally binding.
- What is property repossession?
Repossession is a legal process that occurs when lender obtains a court order to take possession of a property due to non payment of the mortgage. The initial correspondence is usually in the form of a letter reminding you that you have missed payments. It will request you to contact the lender to discuss the mortgage situation and discuss when you intend to catch up on arrears.
If your lender is not satisfied with your proposals, or if your debt and arrears situation gets worse, they will probably write to you again. The second letter usually states that you must immediately clear your debts or make contact with the lenders, or their solicitors will contact you.
Lenders will then apply to the court for a possession order to allow them to take over the property. As a home owner, you can only be evicted if your lender or freeholder has a legal reason (grounds) and the correct procedure is followed. Repossession doesn't happen automatically. It may be possible to stop the process at any stage.
If your home gets repossessed not only will you be homeless but your credit rating will be seriously affected.
