what would happen if...

cady

...... i changed my current account which has an OD on for £600 with halifax and go tmy wages paid into a natwest account which is just a basic abnk account? just i dont want to deal with the halifax anymore but dont have the £600 to pay them and clear it i would create a small standing order to pay a little each month off as i do want to clear it but i dont want to get involved in the debt collection ways or have the OD removed and demanded back either - please has anyone done this or any advise that could help me?

Cady xx

LilacPixie

eventually halifax would remove the OD. I guess it depends on how much you are paying to it each month as to if its cleared before they remove it.

cady

i have very little to pay them but im worrie dthey will remove it anyway when i go on maternity leave as my wage would drop - really want to get away from them but im worried about the implications?

BlueIsTheColour

I did this with Halifax and moved to Alliance and Leicester, I then contacted them to say I had been made redundant and couldnt afford to repay, and now have an arrangement to pay monthly and they have stopped all charges. I guess the key is communicating with them, but I did do it all in writing through their retail bank collections department in Halifax

cady

do you pay them much a month? i could only afford to pay a small amount as im on a very low income and am due to go on maternity leave in august! with a mortgage and bills to pay - im worried they will take the OD off me when my wages drop too!

cady

im also worried as i move on to SMP if i keep my account with them they will remove my OD with no warning as there is going to be lods less money going in to it - that would leave me with a new baby and - my wages does anyone know if they can do this?

Tixy

Hi Cady

I would definatley suggest setting up the new account and having your wages paid in there.

You can either gradully reduce the debt with a standing order and hope they don't take the OD off you (check your accounts T&C as some insist a certain amount is paid in monthly).

I think the preferred option would be to write to them and suggest a repayment plan. I would do a budget for yourself once you only have your maternity income coming in and work out what your expenses will be and then see what is left. If you have very little left you could write to them explaining you can only afford token payments of say £10? per month while you are on maternity leave but that you will increase this to £50 (or whatever) once you start work again. Also ask if they will stop charges & interest for this time. There are some templates on the nationaldebtline website that you could tailor to fit your circumstances.

Then even if they say they won't accept your payment still set up the standing order and make sure you pay it every month.

Good luck, its hard to guess exactly how they will react but I would personally prefer to keep them informed. Plus if they do agree to stop interest & charges this will help clear the debt quicker.

In theory they could take away your overdraft whenever (repayable on demand) so best to get your income paid in somewhere else.

GeorgeUK

Is there anything in the T&C of the overdraft stating that you need a certain amount coming into your account each month? You may be able to use a little creative accounting to get around that if there is - a certain amount needs to go in but it won't state how long the funds need to be there for.

I'd call the bank to double check this if you are unsure - you have the perfect excuse as you will be moving onto SMP anyway.

I'd definately get the SMP & wage paid in to a seperate account though - no point in taking chances.

cady

thanks ill look into the T&C's on the OD and see what it says as i could put some money in and them move it again i suppose but id really rather not !! i shall get back to you all when ive had a look x

cady

ok this is all i can find on it!!!

2. Overdrafts

2.1 Your overdraft is subject to this agreement and offered at our discretion.
2.2 Overdrafts are subject to credit checks and underwriting and are offered at our discretion.
2.3 The facility is up to a maximum of the approved limit on your current account.
2.4 We may vary your limit by giving you 10 days notice or such other notice as is legally required. If you request the variation we may notify you that it is to take effect immediately.
2.5 Overdrafts are repayable on demand which means you must immediately repay all or any part of your overdraft when we demand it.
2.6 Without prejudice to paragraph 2.4 above, we can withdraw or terminate your right to an overdraft at any time for any valid reason which includes, but is not limited to:

• where we are unable to offer overdrafts for technical, legal or other reasons;
• where we decide to remove overdrafts from the features available with your current account;
• where you consistently fail to keep your overdraft within your limit over a period of time;
• where you breach any of these conditions or any other conditions in your agreement with us;
• for any other valid reason

2.7 If we pay you the proceeds of a cheque, apply interest or charges to your current account or make a withdrawal or other transaction which causes your current account to be over your limit, this does not mean we have authorised an increase to your limit. You must immediately bring your current account back within the limit.
2.8 After giving you written notice (where relevant), each month we may take money from your current account to cover any:

• interest due to us on your overdraft or unauthorised overdraft;
• charges due to us on your current account.

2.9 Without limiting or affecting our rights, the overdraft will be available until further notice or until any specified review date advised in the facility letter.
2.10 If you owe us money that we have demanded you repay, we will give you 10 days written notice and take any funds you have deposited with us on any other account. We will hold these funds until either the expiry of the 10 days’ notice period or until the outstanding monies have been repaid. If the 10 days’ notice period expires and the outstanding monies have not been repaid, we will apply the funds held by us in repayment of those outstanding monies.
2.11 You can cancel your overdraft at any time by giving us written notice. From the date we receive the notice, we will cancel your overdraft and reduce your limit to nil. You must immediately repay any overdrawn amounts to us and until you do so, we will charge interest on your unauthorised overdraft until it is repaid. To minimise paying this interest, you should ensure that your overdraft is repaid in full before cancelling it.
2.12 We may refer the collection of outstanding monies to a debt collection agency.
2.13 No provision of this agreement shall affect your statutory rights under the Consumer Credit Act 1995 or any regulations made thereunder. In the event of any conflict between this agreement and such rights your statutory rights will prevail.

TotallyBroke

You need to look at the actual account terms as well, does the account have to have £xxx amount paid in each month. Some accounts need to have £1,000 paid in every month.
If it does then you will need to consider what GeorgeUk says about juggling the accounts to make that work for you.

Can I also suggest that you do a soa if you have not already posted one up. Start cutting back now will make it easier when you have no choice because of the maternity.

Could you ask for a mortgage break for a couple of months and use those payments to pay off a high interest debt or even the overdraft. This will obviously depend on what is on your soa.