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Lending - outstanding debt - bank agreed to write off debt on certain conditions - conditions not fulfilled due to illness - bank threatened further action - once full facts known, bank agreed to write off debt
Mr J took out an unsecured personal loan with a bank. He then developed a serious medical condition which meant that he was unable to work or to repay the debt. The bank held discussions with Mr J and his mother about repayment of the outstanding loan. It then agreed to write off the debt on condition that Mr J first obtained a summary instalment order or declared himself bankrupt. Mr J and the bank signed an agreement to this effect.
Time passed and Mr J did not take any action to obtain the summary instalment order. The bank finally wrote to him indicating that it would commence recovery action if he did not take steps to implement the agreement. Mr J’s mother contacted my office at this point. She felt the bank’s letter was threatening and she could not understand why the bank was pursuing matters. Mr J’s medical condition had become more serious. He had been admitted to a psychiatric hospital and was currently unable to manage his affairs.
My investigator contacted the bank. As soon as it was made aware of Mr J’s current circumstances, the bank agreed to write off the debt without requiring Mr J to take any further action. The bank explained that it had wanted Mr J to take out a summary instalment order or declare himself bankrupt to ensure he was not able to incur further debt. Mr J’s mother was happy with the explanation she received and with the bank’s agreement to write off the debt. With the co-operation of both bank and complainant, I was able to bring matters to a swift conclusion.