Lloyds closed my account whilst overdrawn

It'll likely now go to their collections department who will get in touch with you to arrange repayment. They'll issue you a Formal Demand letter which will ask for payment of the debt in full, whatever you do DON'T ignore this letter. Get in touch with them and arrange a repayment plan. It's unlikely they'll litigate against you given the size of the balance but you won't avoid having to repay it as if you don't they may instruct a DCA. If you co-operate from the get-go they'll happily talk with you and arrange a repayment plan. They'll start by issuing you an Income and Expenditure Form which you will have to complete, they have the right to challenge what you put if it doesn't add up so be completely truthful about your incomings and outgoings. Once they have this they'll arrange a repayment plan with you that fits what you can afford, they aren't allowed to put you in a more difficult financial position than you're already in so will work within the bounds of your means and affordability.

This won't go away but you can get out of it if you act straightaway and admit you owe the money. If you try and get out of it they can instruct collection agents to recover the money and P.I's to check up on your financial situation if you don't appear truthful or try to get out of paying.

It will all be fine, just make contact as soon as you receive their letter and work with them, they're all human and understand people in financial difficulty and will adhere to strict protocol for dealing with customers in financial difficulty.

Good luck and keep us posted.