Debt help needed?
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As a consumer, she took on a loan and the terms were clear: she needs to pay it back. There are no provisions that if the payments became uncomfortable that the bank will make it easier for her. Still, you can try to work with the bank. They may opt to help, but they don't have to.
It sounds like the bank is suggesting she take a new loan to pay off the remainder of the prior loan. The new loan could be set to have monthly payment minimums which she can afford.
Regarding the downside, if the loan is secured then she can either sell or return the item (land, car, etc.) If the loan in unsecured then she can default and watch her credit score drop like a rock. The best option is to take out another loan with payment terms she can handle and get a new job.
Debt help needed?Does she have any property ? Was the loan secured by a guarantor ? If not, the bank can exert no pressure and cannot enforce repayment, because she has nothing they can distrain against.
You are concerned, so I must assume there is security. You must bear in mind that the bank cannot say it is not their problem, because it most certainly is, as they are owed money by a person who cannot repay. There are government provisions for people who have a change in circumstances and cannot repay debts, even under certain conditions allowing for certain elements of the debt to be written off. Your local Citizens Advice Bureau will have full details. I would get the full details of this and maybe think once more of approaching her bank and giving them the alternative...who knows, once you have the info you may not even want to discuss it with them !!
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