have a £1000 overdraft and can't pay it back

becky678

I have a bank account with halifax and it is overdrawn by £1000. They are taking £24 a month in interest from the account so now I am more than £1000 overdrawn. They send me letters saying that i do not have permission to go over my agreed limit of a £1000 even though they are the only ones taking money out each month making me go over my £1000 limit. I have been paying £24 a month into the account just so they can take the interest out. I can not afford to do it any more. My partner was made unemployed, we just do not have the money to pay it back, what can we do?

alo6

Abbey are doing a 12months interest free matched overdraft if you switch to them.

it will just cut out the interest but wont cure the problem.

Jokaty82

You need to write out your monthly expenditure, everything that you spend in a month, then you can identify which areas could be cut back or cut out so you can pay the overdraft back as quickly as possible.

becky678

we cant cut back on anything at the moment, we are behind with all our bills, we don't go out, we just buy what our children needs.

Pee

Are you receiving all the benefits that you are entitled to? It will affect your credit rating, but if you really can't pay, you should let them know and agree a payment of £5 a month which you must then keep up. Can you sell any old children's toys at a car boot sale? Do you work? Is your partner likely to find a new job soon?

agsnu

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/PlanYourWayOutOfDebt/DG_10013291

If you are behind on all of your bills and have no way to pay off your debts, perhaps bankruptcy is the best option. That would be a drastic step though, talk to the National Debtline and CAB etc.

Jokaty82

I def second the car boot sale. I do one twice in the summer. Normally make £100 at each, just old clothes and stuff. Good way to have a clear out and make some money! Anything helps however little. I know you say you dont go out and cant cut back, but have you written anything down? Until you write everything down sometimes you forget stuff.

I mean everything - lunches, petrol, bus fares - everything and then sometimes people on here can really help.

bookworm1363

Start the reclaiming your charges process, I bet a lot of that o/d is made up of their own overdraft charges. Halifax charges per transgression + £30 odd per month "unauthorised o/draft charge", so once you go through your statements, you might be surprised how little you actually owe them.

What you can do as well is write to them with an expense and income sheet, asking them to freeze the interest, and offering to pay them what you can (if it's only £1, then that's what you offer) until such time things are looking up.

They can say yes, in which case all well and good, or they can say no, in which case the old "you can't draw blood out of a stone" applies, and they can take you to court, where a judge is unlikely to grant them much more and then it will be binding.

what you should do is stop panicking: In the descending order of debts, an o/draft is way way way down below in the list of priorities. Your priorities are: rent/mortgage (or loans secured on property), council tax, gas/electricity/water and food. These are the ones you need to deal with. IF you have anything left after taking care of those, THEN you take care of the credit cards, catalogies, overdrafts etc... But first and foremost, you need to keep the roof over your head and what goes with it. Everything else can go hang until things improve.

Pee

Would going bankrupt be a viable option if the debt was say £1,500? I wouldn't choose this route for that sum myself.

bookworm1363

Quite right. Bankrupcy should ALWAYS be a last resort. What we're talking about here is a £1000 o/draft, hardly a life or death situation.

The problem is that when we are used to paying all our bills on time etc when things are going well, it's the devil to adjust to a situation where you have to go back down to basics and it is easy to forget what is a priority. As I said earlier, an overdraft is not. What's more, the banks know this very well and are reluctant to go to court if the customer doesn't seem to present easy pickings.

Furthermore, if OP were to start the bank charges reclaim process, if the bank were to try and go to court for the o/draft, then OP's claim for bank charges would come first... As all bank charges claims are being stayed at the moment and for a while still to go, it means that by the same argument, the bank couldn't pursue a claim against OP when a part of the debt is disputed as per the test case. Stalemate, or breathing space if you will.

Pee

I like it!