IF you’re behind on your loan payments, avoiding your lender is the worst thing you can do. By the time a bailiff arrives to repossess a motor vehicle or seize other assets, the relationship between borrower and lender has already reached a difficult stage. That’s why one bank executive is recommending that borrowers talk to their lenders before the situation reaches that point.

In an interview with the Jamaica Observer, Dr Vinette Notice, vice-president of credit risk management and collections at FGB, said borrowers who begin experiencing financial difficulty should approach their bank before missed payments pile up.

“If you recognise that something may be going wrong with your finances, we encourage persons not to wait for our call, but to come in to us,” Notice said.

She explained that banks do not immediately move to seize assets when a customer misses a payment. Delinquent loans generally pass through several stages before recovery action becomes necessary, and the options available to a borrower are usually greater at the beginning of that process.

A missed payment that is less than 30 days overdue is generally regarded as soft delinquency. In some cases, Notice said, the issue may not even be financial distress. A salary deduction may not have been processed by an employer, for example, or funds may have been applied to the wrong account. A call from the bank can sometimes identify and correct those problems before they develop further.

Where the borrower has suffered a personal loss or is dealing with a major expense that temporarily affects their ability to meet payments, Notice said the bank may be able to put an arrangement in place.

That could mean a payment holiday or revised terms that give the borrower room to catch up on their obligations.

“If it is perceived to be short term the actions, the steps taken with the client, may be different — like a moratorium, an extension of the loan facility — giving them time to catch up on the missed payment or payments,” Notice added.

She reasoned that a customer may also have to revise their budget and determine where changes can be made to balance ongoing expenses and other obligations.

Although this might mean reducing discretionary spending, it could also be an opportunity for the individual to identify ways to free up cash. That could include using a subscription service less frequently, finding cheaper fuel stations, or exploring a refinancing option with another financial institution to lower monthly cash outflow.

“We encourage our clients to review their personal finances, understand their own financial stress that they are experiencing, review their budget. That’s something that we find that many of our customers don’t do but it’s such a practical and useful tool,” the FGB executive explained.

But the longer a borrower remains in arrears without engaging the bank, the fewer options may remain.

FGB said customers with overdue balances are contacted through phone calls, emails and letters as the bank seeks to have the account brought back into good standing. Once a loan remains delinquent for more than 90 days without meaningful engagement from the borrower, it becomes non-performing and the lender may begin considering its legal and contractual options for recovering the outstanding funds.

The course of action depends partly on the type of loan.

In the case of unsecured credit, the obligation may be sold to another party for collection. Where the balance is substantial, the lender may also seek a court judgment that can be enforced against the borrower’s assets. For motor vehicle loans, the bank may exercise its rights under the bill of sale and engage a bailiff to repossess the vehicle. The vehicle is generally placed in storage and may later be sold as the lender seeks to recover some of the outstanding debt.

The consequences can be abrupt for borrowers.

Repo Jamaica, a repossession company that works with financial institutions to recover assets secured under credit arrangements, recently said it seized 14 vehicles from a beach party on August 9 and 80 vehicles between August 1 and 9 during the holiday period. But repossession is not necessarily an attractive outcome for the lender either.

Notice said the process brings additional costs, including bailiff fees, storage charges, legal expenses and costs associated with eventually disposing of the asset. Even after a vehicle is sold, the proceeds may not necessarily cover the full amount owed. And for the borrower, the consequences may extend well beyond losing the asset.

A default can damage the person’s credit history and make it more difficult to obtain financing later.

“Not paying, not honouring your obligation, not having a conversation with the bank to get into an arrangement can impair their creditworthiness and affect their ability to do further borrowing and investments, investing in an asset in the future,” Notice told the Sunday Finance.

She stressed that even where a borrower has been laid off, becomes ill or experiences some other financial shock, lenders may still be willing to work with the customer while they recover.

From the bank’s perspective, helping a borrower return to good standing can also preserve a longer-term relationship with a customer who may need financing again.

That, however, depends heavily on communication.

Notice said a bank cannot properly assess what assistance may be available if the customer does not explain what is happening. In some cases, lenders are also required by legislation or regulation to take certain steps once accounts remain delinquent for specified periods, reducing the discretion available if a borrower continues to avoid contact.

Her message to customers facing financial difficulty is that a temporary setback does not necessarily have to become a permanent financial problem.

“You’re going to live again. You are going to come out of this. We have seen it happen to so many of our customers and they come out and they are able to manage their credit report, their creditworthiness and resurface stronger and better,” Notice said.

The advice comes as the value of past-due loans in Jamaica’s financial system has risen sharply.

According to Bank of Jamaica data, loans overdue by between one and three months stood at $74.70 billion as at July 31, up 47 per cent from $50.69 billion at the end of December 2025.

Non-performing loans, those overdue by more than three months, meanwhile fell eight per cent to $38.90 billion.

Among commercial banks, building societies and the merchant bank, non-performing loans totalled $36.71 billion and accounted for 2.5 per cent of gross loans in the banking system.