HSBC bank loan defaulted! How to start the process?

Hi guys, I’ve defaulted recently on my bank loan with the HSBC and overdraft. I had a £15k loan and was paying it for 6/7 months but started to struggle when some things inc work didn’t work out. I increased my overdraft to £4250 to help cover but wasn’t able to get my head back above water. I knew what was about to happen so I moved my last lot of wages to be paid into another bank account with Barclays, set up new direct debits etc and got a couple of credit cards to ensure I still have credit in the future. I lost my job shortly after all this and currently I’m unemployed with no income.

HSBC bank started calling me shortly after asking why I defaulted and when was I going to be paying my loan and overdraft. I told them my financial situation and didn’t have the money to pay then they asked how was I paying my bills like electric. I told them I didn’t pay any bills as I lived at my parents house (the loan and all credit were taken out at my parents address as I moved there after I had a breakup a few years ago. I officially live at my parents but been staying with my girlfriend for a while now) After that they started asking me to confirm address etc. At this point I told them I was depressed and couldn’t cope, told them they were causing me anxiety with all the questions. They said they would leave me for a coulple months to get myself sorted. All I’ve had so far is letters about defaulting.

What’s the best course of action now? Is it the 3 letter process? If so how do I know the CEO of HSBC bank to address to etc? I’ve never done this before and not too good with letters. I’m more of bury my head in the sand and ignore!

Best regards

Paul

What date did you take out the loan?
When was the last payment you made?
When was the last time you acknowledged the debt, either over the phone or in writing -

STOP all payments and discussing the debt with them until they have responded to your 3 letters. I haven't seen the updated ones but you need to request a true copy of the ORIGINAL SIGNED AGREEMENT.
You also need to ask for:
1) the default notice if you think they have sent one. If you have the original do not tell them yet.
2) any termination letter that followed the default

If it takes them longer than 12 days to send you the agreement, the debt is unenforceable until they provide it. They may supply a reconstituted agreement.

Further advice will depend on all the above.

I wouldn't be real keen to tell them too much about my domestic situation.

Anything you say will be will be taken down and used in evidence against you.

It will be used to 'help' you to work out your costs and how much you can afford in a payment plan which they will highly likely bring up with you at some point.

Payment plans are definitely NOT recommended but the decision is yours to make. I haven't got time to explain why they are not recommend, right now.

I don't want to jump the gun here but this info may be helpful in your future negotiations with the bank. It could be several weeks before you get to this stage.

Unconscionable conduct is about these things:

• the relative bargaining strength of the parties
• the use of undue influence, pressure or unfair tactics
• whether the stronger party made adequate disclosure to the weaker party
• the willingness of the stronger party to negotiate
• the extent to which each party acted in good faith
• the stronger party unfairly exploits the weaker party's disadvantage the stronger party unfairly exploits the weaker party's disadvantage
• the stronger party relies on their legal rights to take advantage of the weaker party in a way that is harsh or oppressive
• the stronger party allows the weaker party to rely on an incorrect assumption, or fails to disclose an important fact
• one party benefits unfairly from the deal at the expense of the other party
• the weaker party is unable to understand the deal, due to lack of experience or professional advice.

This might help with unfair contract terms:
The following questions can help you recognise a potentially unfair term, but it is important to note that the final decision on whether a term is unfair can only be made by a court.
• Does the term cause a significant imbalance between your rights and obligations and those of the business?
• Is the term reasonably necessary to protect the legitimate interests of the business?
• Would the term cause you detriment (financial or non-financial) if the business tried to enforce it?
• How transparent is the term?

A creditor or debt collector cannot mislead the debtor in the context of repayment negotiations. For instance, they must not:
• advise a debtor that you do not, or are unable to, enter into repayment arrangements when this is not the case
• mislead a debtor about their rights, for example, a right to seek a repayment variation
• mislead a debtor about the consequences of non-payment
• mislead a debtor about the legal status of a debt

It is also unacceptable to pressure a debtor to:
• pay in full or in unreasonably large instalments, or to increase payments when they are aware they are unable to do so
• pay a large upfront amount and state that only afterwards will they consider payment arrangements
• get further into debt to pay out an existing debt
• show proof of unsuccessful alternative credit applications before a repayment plan will be negotiated.

It is also unacceptable to pressure a debtor to:
pay in full or in unreasonably large installments, or to increase payments when you are aware they are unable to do so
• pay a large upfront amount and state that only afterwards will you consider payment arrangements
• get further into debt to pay out an existing debt
• show proof of unsuccessful alternative credit applications before a repayment plan will be negotiated.
• borrow from family or friends to pay out a debt
• access their superannuation early.