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    • flanker
    • By flanker 7th Dec 17, 10:19 AM
    • 9Posts
    • 1Thanks
    flanker
    Opening a basic bank account with overdrawn current account
    • #1
    • 7th Dec 17, 10:19 AM
    Opening a basic bank account with overdrawn current account 7th Dec 17 at 10:19 AM
    Hi there,

    I'm due to receive an small inheritance from my late uncle, but I have a bit of a problem in that my current account is well beyond my overdraft limit. So most of the money would be swallowed up if paid into that account.

    I'd much rather offer a full and final settlement with the bank (a lot of it came from charges and interest) using some of the inheritance, so I need to pay it into a different bank account that's in my name.

    Obviously my credit rating isn't great, so I went to a few different high street banks and asked about opening a basic bank account and they all said I couldn't if I had another current account that was open.

    Is there anyone who will let me open a bank account, despite having a bad credit rating and an existing current account?

    Many thanks
Page 1
    • binaryuniverse
    • By binaryuniverse 7th Dec 17, 10:44 AM
    • 478 Posts
    • 262 Thanks
    binaryuniverse
    • #2
    • 7th Dec 17, 10:44 AM
    • #2
    • 7th Dec 17, 10:44 AM
    I was told the same, when I did have a load of defaults on account. But I did get a second account via Lloyds. Think I applied for a normal one, online, and was given a basic one. Had a debit card and such.

    Even so, if I was in your position, I'd be using that lump sum to pay off the overdraft. Once that is done, start looking at how you can avoid getting in to that scenario ever again.
    • GDB2222
    • By GDB2222 7th Dec 17, 10:52 AM
    • 14,179 Posts
    • 76,278 Thanks
    GDB2222
    • #3
    • 7th Dec 17, 10:52 AM
    • #3
    • 7th Dec 17, 10:52 AM
    Hi there,

    I'm due to receive an small inheritance from my late uncle, but I have a bit of a problem in that my current account is well beyond my overdraft limit. So most of the money would be swallowed up if paid into that account.

    I'd much rather offer a full and final settlement with the bank (a lot of it came from charges and interest) using some of the inheritance, so I need to pay it into a different bank account that's in my name.

    Obviously my credit rating isn't great, so I went to a few different high street banks and asked about opening a basic bank account and they all said I couldn't if I had another current account that was open.

    Is there anyone who will let me open a bank account, despite having a bad credit rating and an existing current account?

    Many thanks
    Originally posted by flanker
    Could you ask the executors to hang onto the money for a month or two, whilst you sort out your bank? That seems simpler than opening a new account.
    No reliance should be placed on the above! Absolutely none, do you hear?
    • flanker
    • By flanker 7th Dec 17, 11:03 AM
    • 9 Posts
    • 1 Thanks
    flanker
    • #4
    • 7th Dec 17, 11:03 AM
    • #4
    • 7th Dec 17, 11:03 AM

    Even so, if I was in your position, I'd be using that lump sum to pay off the overdraft. Once that is done, start looking at how you can avoid getting in to that scenario ever again.
    Originally posted by binaryuniverse
    Thank you for the advice. I am indeed planning to use a fair chunk of the lump sum to close the overdrawn account via a full-and-final settlement - hence why I need another account to pay it into.
    • Anthorn
    • By Anthorn 7th Dec 17, 11:54 AM
    • 3,290 Posts
    • 846 Thanks
    Anthorn
    • #5
    • 7th Dec 17, 11:54 AM
    • #5
    • 7th Dec 17, 11:54 AM
    Thank you for the advice. I am indeed planning to use a fair chunk of the lump sum to close the overdrawn account via a full-and-final settlement - hence why I need another account to pay it into.
    Originally posted by flanker
    My guess is therefore that you don't intend to pay off the full amount you owe and will instead be seeking to pay a reduced amount as a full and final settlement and you don't yet have that agreement from the bank.

    If the above is true the problem you could have is that the bank is only likely to agree to a lower amount in full and final settlement if there is no chance of getting the full amount any time soon. Most lenders are likely to look upon a lower amount in full and final settlement as a cost saving measure.

    Have a look at Coventry Building Society Money Manager. It's a savings account without any credit element so likely to be opened without a credit check and it has most of the functions of a current account including a VISA "cash card" allowing ATM withdrawals. But no overdraft which in your case might not be a bad thing:
    https://www.coventrybuildingsociety.co.uk/consumer/product/savings/everyday_money/moneymanager.html
    Last edited by Anthorn; 07-12-2017 at 12:21 PM.
    • eskbanker
    • By eskbanker 7th Dec 17, 12:39 PM
    • 5,902 Posts
    • 5,861 Thanks
    eskbanker
    • #6
    • 7th Dec 17, 12:39 PM
    • #6
    • 7th Dec 17, 12:39 PM
    Thank you for the advice. I am indeed planning to use a fair chunk of the lump sum to close the overdrawn account via a full-and-final settlement - hence why I need another account to pay it into.
    Originally posted by flanker
    'Full' as in paying back everything you owe them or do you mean "I could pay all my debt back but feel it's morally justifiable to try not to"?
    • GDB2222
    • By GDB2222 7th Dec 17, 1:50 PM
    • 14,179 Posts
    • 76,278 Thanks
    GDB2222
    • #7
    • 7th Dec 17, 1:50 PM
    • #7
    • 7th Dec 17, 1:50 PM
    'Full' as in paying back everything you owe them or do you mean "I could pay all my debt back but feel it's morally justifiable to try not to"?
    Originally posted by eskbanker
    He may feel it's not morally justifiable but want to do it anyway. Please feel free to cast the first stone, assuming that you have never done anything wrong in your life.
    No reliance should be placed on the above! Absolutely none, do you hear?
    • flanker
    • By flanker 7th Dec 17, 2:03 PM
    • 9 Posts
    • 1 Thanks
    flanker
    • #8
    • 7th Dec 17, 2:03 PM
    • #8
    • 7th Dec 17, 2:03 PM
    'Full' as in paying back everything you owe them or do you mean "I could pay all my debt back but feel it's morally justifiable to try not to"?
    Originally posted by eskbanker
    A large chunk of the amount I owe came from big charges and interest - mainly on the balance of an overdraft limit that Santander decided to withdraw at short notice. Unfortunately I had a bad accident that broke my patella, so wasn't able to work and pay off the overdraft in the single month they wanted.

    From there it snowballed.

    So no, I don't feel morally wrong paying back the money I actually owe - as opposed to the interest and charges.

    But thank you so much for the judgment. I now regret bothering to come on these forums.
    • Anthorn
    • By Anthorn 7th Dec 17, 4:16 PM
    • 3,290 Posts
    • 846 Thanks
    Anthorn
    • #9
    • 7th Dec 17, 4:16 PM
    • #9
    • 7th Dec 17, 4:16 PM
    A large chunk of the amount I owe came from big charges and interest - mainly on the balance of an overdraft limit that Santander decided to withdraw at short notice. Unfortunately I had a bad accident that broke my patella, so wasn't able to work and pay off the overdraft in the single month they wanted.

    From there it snowballed.

    So no, I don't feel morally wrong paying back the money I actually owe - as opposed to the interest and charges.

    But thank you so much for the judgment. I now regret bothering to come on these forums.
    Originally posted by flanker
    Seeking to pay a reduced amount in full and final settlement is not unknown and you'll find several examples of it if you search MSE Forums. But usually it's because someone has fallen into debt, wants to get rid of the debt but either don't have the full amount in order to pay off the debt or paying it off will cause severe hardship. But in your case you seek to hold back funds which you could use to pay off more of the debt. I assume the lender did not keep the charges, fees and interest a secret and you agreed to them and you should pay them provided you have the money to pay. Morals don't have anything to do with it. Hey if that's a judgement then so be it.
    • eskbanker
    • By eskbanker 8th Dec 17, 12:56 AM
    • 5,902 Posts
    • 5,861 Thanks
    eskbanker
    I don't feel morally wrong paying back the money I actually owe - as opposed to the interest and charges.
    Originally posted by flanker
    You're not the first and won't be the last to try to rationalise partial debt repayment on the entirely spurious grounds that the costs of borrowing (that you'd have agreed to when doing so) are somehow less legitimate that the amount originally borrowed and can therefore be unilaterally ignored when the time comes to settle up, but it's a completely bogus argument that holds no water....
    • allybee101
    • By allybee101 8th Dec 17, 1:13 PM
    • 730 Posts
    • 5,223 Thanks
    allybee101
    To answer your question about bank accounts, I think most high street banks class a basic account as one for someone who doesn't qualify for a current account due to a poor credit rating. It usually has very basic facilities (debit card but no interest rates for a credit balance and no overdraft facility).
    If you already have a current account the banks probably won't want to set up a basic account.

    You should be able to open a second current account without too much difficulty. I have my main current account with one bank and a couple of months ago I opened a TSB Classic account to help with budgeting for some separate costs. I didn't apply for an overdraft facility on the TSB account so I don't think a credit check was carried out.

    Alternatively, set up a savings account, deposit the money in there and then move around as necessary.
    "Does it spark joy?" - Marie Kondo

    "Do not wait; the time will never be "just right." Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along." Napoleon Hill
    • EarthBoy
    • By EarthBoy 8th Dec 17, 2:04 PM
    • 1,765 Posts
    • 1,078 Thanks
    EarthBoy
    I'd much rather offer a full and final settlement with the bank (a lot of it came from charges and interest) using some of the inheritance, ...
    Originally posted by flanker
    You do realise that the bank have no obligation to agree to a full and final settlement and they might tell you to get knotted?

    In fact, if you offer a large amount in settlement it could alert them to the fact that you do have funds available, so they might well decide that it's more profitable to insist that you continue paying your overdraft off under the existing terms.
    • tastyhog
    • By tastyhog 8th Dec 17, 9:58 PM
    • 184 Posts
    • 276 Thanks
    tastyhog
    Get an account with monzo, starling etc

    Easy and quick to setup, full debit cards etc
    • MMC87
    • By MMC87 9th Dec 17, 12:01 PM
    • 31 Posts
    • 41 Thanks
    MMC87
    Hi Flanker

    Iíve just opened an account with Virgin Money - itís a basic account with no credit element and they advertise their services for people who are on benefits, have poor credit rating etc. That could be an option.

    You might be able to get more info on the Debt Free Wannabe section of the forum. Itís also a judgement free place to post.
    • Dobbibill
    • By Dobbibill 9th Dec 17, 12:46 PM
    • 2,545 Posts
    • 3,634 Thanks
    Dobbibill
    Hi Flanker,

    Is there any reason you don't want another current account?
    Having a second current account is nowadays quite normal practice.

    As a sidenote - have you spoken to Santander about the charges?
    I'm sure you are aware of the implications of your CR being marked as partial payment if you opt for F&F settlement and the 6 yrs information is held. (This is not a dig at what you should/shouldn't do....merely a heads up )
    I'm a Board Guide on the Energy, Student Money Saving, UK Armed Forces and
    Local Money Saving - Wales boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    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.


    A person who never made a mistake, never tried anything new.
    • eskbanker
    • By eskbanker 9th Dec 17, 11:56 PM
    • 5,902 Posts
    • 5,861 Thanks
    eskbanker
    You might be able to get more info on the Debt Free Wannabe section of the forum. Itís also a judgement free place to post.
    Originally posted by MMC87
    It is indeed, and rightly so, but at the risk of labouring the point, most people on there are posting because they're genuinely up to their eyeballs in debt and can't see a way out of it. Someone rocking up and explaining that they have an overdraft but are handily receiving a lump sum that's more than enough to pay it off (but just want to conceal that fact from their lender) is unlikely to receive a particularly sympathetic response....
    • Iwanttobefree
    • By Iwanttobefree 12th Dec 17, 6:26 PM
    • 1,066 Posts
    • 2,673 Thanks
    Iwanttobefree
    He may feel it's not morally justifiable but want to do it anyway. Please feel free to cast the first stone, assuming that you have never done anything wrong in your life.
    Originally posted by GDB2222
    Also he might feel that had the bank been a little sympathetic, rather than lump charge after charge on, he wouldn't be in this situation in the first place

    If a majority of his OD are charges, I would have zero problem with him paying the least he can
    Formerly Tribulation:

    "It seemed to me that any civilisation that had so far lost its head as to need to include a set of detailed instructions for use in a packet of toothpicks, was no longer a civilisation in which I could live and stay sane." ...Wonko the Sane
    • YorkshireBoy
    • By YorkshireBoy 12th Dec 17, 6:32 PM
    • 29,616 Posts
    • 17,476 Thanks
    YorkshireBoy
    Also he might feel that had the bank been a little sympathetic, rather than lump charge after charge on, he wouldn't be in this situation in the first place
    Originally posted by Iwanttobefree
    Unless it's one of the same banks (or a member of the same banking groups) that took a hit last time the OP decided they didn't want to pay their dues?...

    http://forums.moneysavingexpert.com/showthread.php?t=4738963
    • Iwanttobefree
    • By Iwanttobefree 12th Dec 17, 6:51 PM
    • 1,066 Posts
    • 2,673 Thanks
    Iwanttobefree
    It is indeed, and rightly so, but at the risk of labouring the point, most people on there are posting because they're genuinely up to their eyeballs in debt and can't see a way out of it. Someone rocking up and explaining that they have an overdraft but are handily receiving a lump sum that's more than enough to pay it off (but just want to conceal that fact from their lender) is unlikely to receive a particularly sympathetic response....
    Originally posted by eskbanker
    That depends on the entire situation.

    I have been very ill for a number of years, thankfully I'm now slightly better but still too ill to work (at least a year away from considering part time work according to my GP and Physio).

    We are on a debt management plan, have been on it for a few years, we did owe £32300 when we started it, we now owe £26513 so it's going down, all be it slowly.

    Meanwhile my wife is working her socks off, long hours 6 days a week, just to cover all bills (I'm not looking for sympathy, just explaining our situation) .

    We've had one holiday in the last 7 years, that was 4 days in Amsterdam that my son and daughter got us for a surprise birthday present for my wife 3 years ago.

    We have no landing/stair carpet, bedroom is in dire need of decorating (wallpaper falling off the wall literally), oither things in the house needing fixing.

    Two years ago I sold almost everything I own (Camera, Very decent digital piano, music software etc) as our car had died, to allow my wife to get a new (well 2004 reg) car for her job as a mobile hairdresser.

    As things stand, it's going to be about another 12 + years until we pay our debts off (as mortgage is paid off in 7 hence we can up our payments to creditors).

    Last Christmas an elderly friend of mine died, he knew my situation, before he died he told me he's leaving me a little something to spend on enjoying myself, not to spend on repaying my debts.

    As it turned out he left both me, my wife and both our grown up kids £2500 each

    So we had £5000. That would reduce our debts from 26k to 21k and stiil take about a decade to pay off.

    My wife needs a holiday, she is drained from stress and work, so she's spending part of hers for a short getaway for us both to Europe around May next year, she's spending another part on getting landing and stair carpets.

    I spent some of mine on things for the house (new light for dining room, wallpaper for the bedroom etc) but spent the majority on getting back second hand versions of the stuff I had sold two years previously.

    So I now have another piano (although not as good as my original) bought 2nd hand off ebay and I now have another camera that's better than my original due to tech advances but was bought second hand off ebay.

    I re bought one part of my music software dirt cheap second hand from from ebay, I got the other part brand new but on a black Friday type sale where it was massively reduced.

    I bought a new (again second hand) big external filter for my fish tank.

    Many of you will say we should have paid off some of our debt but to be honest it was getting to the point where life for both of us felt like not worth living.

    We would be in the same situation in 5 years time whether we paid the 5k off our debt or we didn't, and another 5 years without a break, without being able to do needed stuff to the house etc would be unbearable (and probably kill my wife).

    Being stuck at home, I missed my piano etc. Sure I cant play it everyday due to health issues, but it's very nice and relaxing for those times I can.

    Now if we had inherited an amount that cleared or virtually cleared all our debts, that would be a different matter, but once you've been in debt, and skint for year after year after year, it really does have an adverse effect to your health, and my elderly friend could see that, and I suspect that's why he said he didn't want me to clear any of my debts with it. Even if he hand't said what he did say, I still wouldn't have paid it off my debts for the reasons listed above.
    Last edited by Iwanttobefree; 12-12-2017 at 7:01 PM.
    Formerly Tribulation:

    "It seemed to me that any civilisation that had so far lost its head as to need to include a set of detailed instructions for use in a packet of toothpicks, was no longer a civilisation in which I could live and stay sane." ...Wonko the Sane
    • Iwanttobefree
    • By Iwanttobefree 12th Dec 17, 6:52 PM
    • 1,066 Posts
    • 2,673 Thanks
    Iwanttobefree
    Unless it's one of the same banks (or a member of the same banking groups) that took a hit last time the OP decided they didn't want to pay their dues?...

    http://forums.moneysavingexpert.com/showthread.php?t=4738963
    Originally posted by YorkshireBoy
    Ah, I wasn't aware of all that
    Formerly Tribulation:

    "It seemed to me that any civilisation that had so far lost its head as to need to include a set of detailed instructions for use in a packet of toothpicks, was no longer a civilisation in which I could live and stay sane." ...Wonko the Sane
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