If you have a loan (not a mortgage) with Northern Rock and they go bust....?

What happens to your loan?

Does it get written off? Would you have to pay it all back?

And do you think they will infact go bust (considering their 鎷?00million bail-out by the bank of England) and having 30% wiped off their share price in the matter of a few hours??

Is this also a grave sign that we are about to head into a rather brutal recession?

Thanks for your help.

If you have a loan (not a mortgage) with Northern Rock and they go bust....?

When loan companies go bust their loans are sold to other loan companies so you will still owe the loan just to someone else.

If you have a loan (not a mortgage) with Northern Rock and they go bust....?

some one will purchase their loan package

If you have a loan (not a mortgage) with Northern Rock and they go bust....?

If a bank goes bankrupt the loans are considered assets of that bank...just like in anyother company bankruptcy the assets are sold off to other companies and the proceeds of the sale are used to pay off the bankrupt companies debts.

What this means for banks is that the loans (all loans, not just the mortgages) are sold to other banks (sometimes all are sold to the same bank sometimes they are broken up and sold to several different banks). If you should find out your bank is going bankrupt you should continue to make your payments until you are notified who has purchsed your loan and then you will start making your payments to the new bank. If you were to stop making your payments the new bank who aquires your loan will register and report those late payments/non payments to the credit reporting bureaus.