First Direct withdrawing overdraft

greensalad · 15 June 2017 at 3:09PM

I received a letter last week saying my overdraft will be entirely withdrawn next month. It's £1500.

Normally I would be freaking out right now but as a very lucky turn of events, I have been thrown a lifeline. My partner and I had a frank discussion about finances and decided that as we intend to stay together a couple for the long run, and that he earns 4x as much as me, we are going to combine finances so I can repay my debt much more quickly. I'll still be withdrawing a small personal spending fund from the joint account (and him a larger one, to reflect that he is the breadwinner!) but we've allocated a sum per month that I can use towards debt repayment which I can divide up against my various creditors as I see fit :T It's such a relief. I basically explained to him my suicidal feelings and depression and anxiety around my financial situation. He pointed out that we pay 50/50 on household things despite his larger salary. He asked me if I felt the debt issue was the root of my mental health issues and I said yes. I had never had anxiety, panic attacks or suicidal thoughts until I entered this crisis. And, for example, normally a letter from a creditor demanding repayment would have me hyperventilating on the kitchen floor but since we made this arrangement I felt I could just calmly get through this and got the letter sent off the following day.

On getting the letter I immediately wrote back to FD to propose what I thought was a decent repayment plan (repaying and reducing the £500 every two months, meaning it's repaid by November). I didn't include the budget sheet as I feel like I prefer to hold my cards to my chest if possible, but perhaps I was foolish.

They've written back and said no, it must be repaid entirely next month.

So I have reshuffled my allotted debt repayment budget and I can afford (paying minimums on everything else) to pay them £1200 beginning of July, £300 beginning of August.

Advice on what to do:

a) Does this sound reasonable? I'm not surprised they are wanting to withdraw as I have been up to the hilt on my OD many times in 2017.

b) Should I bite the bullet and fill in the full sheet now, or try once more to offer them the £1200/£300 payment?

Thanks for any help

EssexHebridean · 15 June 2017 at 3:39PM

An overdraft is repayable in full on demand, unfortunately. My guess is that they are now seeing you as a bad risk, hence the demand. Is your joint bank account also with FD or indeed HSBC? If not, fine, if it IS I'd suggest you move it ASAP and make sure that your next salary payment - and OH's - go elsewhere.

Is the root of your problem that the 50/50 arrangement on the household stuff was leaving you too tight to meet your necessary outgoings? Or are you generally overspending? You need to know this so you can prevent problems in the future.

greensalad · 15 June 2017 at 3:47PM

No our joint is with Santander and we might move it elsewhere, but not First Direct.

The problems are due to both. Overspending, and 50/50 stuff. Since the beginning of the year I have massively reduced the overspending with help from understanding partner (knowing when it's OK to say NO to social events which is where all my money was going) and also reworking our finances so I'm not a) spending the same on leccy/rent/insurance stuff as my partner and also not spending more on the household budget (cat food, things needed for the house et cetera) because I used to be embarrassed to say I was struggling and couldn't afford it when he would say "just pick up some cat food in town" etc. Now that we've addressed the issues things have got a lot better in terms of spending and I've managed to reduce my debt by a few grand! The addition of these extra funds will help me make a huge splash because it means rather than scraping a little over the minimums, I can actually pay off large chunks.

I know why FD have requested it, but I was hoping my proposal would be alright with them. Apparently not.

EssexHebridean · 15 June 2017 at 3:55PM

Sounds like you're on the right track, at least. I'd suggest you've got nothing to lose by writing again to FD with a further proposal - perhaps to repay over 2 months £750 a month? Do you have anything spare you can throw at it right now as a gesture of goodwill, so they can see an effort is being made?

I take it when you say you've written, you do mean hard copy in the post? That can at least gain you a bit of time as it's slower than emails. (Crafty, I know!)

anna_1977 · 15 June 2017 at 3:59PM

Just wanted to add that if you have a lot of debt and your partner doesn't a joint account may not be a good idea, especially if you're having problems paying it back

sourcrates · 15 June 2017 at 4:09PM

They can demand payment all they like, doesn't mean they will get it.

All they will do is farm it out to a DCA to collect.

You will be able to make whatever arrangement you choose virtually once the debt is sold, if you want to wait that long.

greensalad · 15 June 2017 at 4:10PM

We already have a joint account so the damage, I think, is done and our names are financially linked. What we're doing is instead of paying our salaries into our own accounts and then transferring a set sum into our joint, we're just getting paid directly into our joint and withdrawing funds into our own account for personal use.

And yes, hard written letter. They did respond quickly which puts me at ease. But if it comes to the line, I will have to call. I hate calling as I feel like it's easier for them to bully you and I find it hard to collect my thoughts and not get emotional and anxious. But still they will always try to call.

greensalad · 15 June 2017 at 4:14PM

Thanks, I hadn't thought of that.

I'm currently arranging to change my salary to the joint account. I am going to withdraw my "savings" (I set aside my travel card money when I get paid, as I don't buy my rail ticket until midway through the month) as cash and just store them at home until I figure out what to do!

This way I'm guessing if they go ahead and withdraw the OD in July, they'll do so with the £1200 in there which is the payment I intended to make anyway. They then only have £300 outstanding, which when I write to them and say I'll pay it in August hopefully they'll consider.

First Direct withdrawing overdraft

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