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  • FIRST POST
    • TwentySomethingGirl
    • By TwentySomethingGirl 20th Mar 17, 11:40 AM
    • 167Posts
    • 368Thanks
    TwentySomethingGirl
    Advice on where to start
    • #1
    • 20th Mar 17, 11:40 AM
    Advice on where to start 20th Mar 17 at 11:40 AM
    Hi

    I'm not in debt myself but I'm going to help a friend deal with their debt and need a bit of advice. Most of her debts are defaulted already and quite old so I'm going to help her set up a self managed DMP. However, she has an overdraft which was originally on a student account but is not any more. This account is the one her pay goes into so each month a bit of the overdraft gets paid and then used again. She's being charged £30 a month for the privilege. How can we go about getting the charges to stop? I was thinking of seeing if she can open another bank account to use day to day and letting the charges push the overdraft over it's limit which presumably would cause it to default and then we can ask for the charges to be frozen. Is there another/better way to do it?

    Thanks in advance
    Mortgage £126746 DEC14 £122423.53 DEC15 £115041.70 DEC16 Remortgaged Sep17 to pay off HtB loan £150000
    MFW2017 #85 £2633.7/£2500 12K IN 17 #85 £5500/£12000
    MFW2016 £3614.63/£2500
    MFW2015 £811.60/£1200
Page 1
    • sourcrates
    • By sourcrates 20th Mar 17, 11:50 AM
    • 12,444 Posts
    • 11,851 Thanks
    sourcrates
    • #2
    • 20th Mar 17, 11:50 AM
    • #2
    • 20th Mar 17, 11:50 AM
    Hi,

    Yes, she should open a new basic bank account, with a bank with whom she has no debts.

    Anyone can open a basic account, and there is no credit check.

    Her old account can then be treated as just another debt to be serviced, she should write and ask for the old account to be frozen and interest and charges stopped, so she has a better chance of repaying what she owes.

    As regards her other debts, how old are they approx ?

    Any that are 6 years old or more, that have not been paid in that time ?
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • TwentySomethingGirl
    • By TwentySomethingGirl 20th Mar 17, 12:03 PM
    • 167 Posts
    • 368 Thanks
    TwentySomethingGirl
    • #3
    • 20th Mar 17, 12:03 PM
    • #3
    • 20th Mar 17, 12:03 PM
    Hi

    Thanks for the reply.

    I don't think any of the debts are 6+. Some are probably approaching that, I know one of them was for a hire purchase car which she thought had been paid (long story) which must have defaulted at least 2 years ago, so the original agreement would have started about 6 years ago. The other debts were a couple of loans and a phone contract which are all from the last 3 or so years. The overdraft is the only debt that hasn't defaulted or been passed to a debt collectors so I want to get the charges stopped or it won't help the debt decrease.
    Mortgage £126746 DEC14 £122423.53 DEC15 £115041.70 DEC16 Remortgaged Sep17 to pay off HtB loan £150000
    MFW2017 #85 £2633.7/£2500 12K IN 17 #85 £5500/£12000
    MFW2016 £3614.63/£2500
    MFW2015 £811.60/£1200
    • TwentySomethingGirl
    • By TwentySomethingGirl 21st Apr 17, 12:04 PM
    • 167 Posts
    • 368 Thanks
    TwentySomethingGirl
    • #4
    • 21st Apr 17, 12:04 PM
    • #4
    • 21st Apr 17, 12:04 PM
    Hi

    So I have managed to sit down with my friend and go through all the debts. In total it is about £6K.

    She wants to try and keep the current account open and not defaulted as it is her only good credit product. Will writing to the bank and telling them she is dealing with debt and asking for the charges to be stopped make them likely to demand the whole OD be paid back? It's Natwest if that makes any difference.

    We did a budget and on months when she does no overtime she only has about £40 spare for debt repayments. Is it better to write to all creditors and offer them the same, and very small, amount? Or can she start with the smallest first (which is about £70) and get that paid off, then the next and do them one by one?

    Thanks for any help
    Mortgage £126746 DEC14 £122423.53 DEC15 £115041.70 DEC16 Remortgaged Sep17 to pay off HtB loan £150000
    MFW2017 #85 £2633.7/£2500 12K IN 17 #85 £5500/£12000
    MFW2016 £3614.63/£2500
    MFW2015 £811.60/£1200
    • sourcrates
    • By sourcrates 21st Apr 17, 12:18 PM
    • 12,444 Posts
    • 11,851 Thanks
    sourcrates
    • #5
    • 21st Apr 17, 12:18 PM
    • #5
    • 21st Apr 17, 12:18 PM
    Her bank may agree a 3-6 month temporary arrangement where they suspend interest, but they will only do this on a short term basis, after that they could demand the OD be repaid, and close the account, much better to remove that from the equation, and open a new basic account instead.

    Without seeing her statement of affairs its difficult to advise what she should do, depends who the creditors are, how much she owes each one, what interest she is paying etc.

    She could tackle them one by one if they are relatively small debts, which it sounds like they are, are the accounts with the original creditors still, have any been sold on ?

    Best discounts come with accounts that have already been defaulted and sold.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
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