Bank account frozen - help!

Spidie

My current account and my credit card are with the same bank. I have a credit card debt of £1,240 and the bank has frozen my account because at the moment I have £1,400 in my current account..I am on benefit (incapacity & housing) and have been for over a year so my finances are a major balancing act. The only reason why there is that much money in my account is because my rent was due yesterday and I recently moved, got my previous deposit back and now have to pay my new landlady a deposit. The debt seems to have been handed to a debt collecting agency who are demanding full payment immediately, regardless of anything I say re benefit/rent etc. Can they do this? If they take the money out of my account I will be left with less than £200..I am desperate. Is there anything I can do to stop this happening?

NickX

You need to get that £1400 out of your bank account ASAP.

If necessary get down to the branch at 9.00am tomorrow and withdraw it in cash.

There is a very strong possibility that the bank will use their "right to offset" to claim those funds to pay off your debts.

When struggling to pay a particular bank, you really must keep your funds in a separate bank with no links to the one that you owe the money to otherwise this is highly likely to happen.

Good Luck.

Spidie

Rats, I thought that would be the case. Unfortunately I can't withdraw any money..they have in their tight little fists!! So I suppose I have to resign myself to this? Are there any rules about fair play..ie not rendering someone destitute?..which is effectively what would happen..I ahev no saving or any other money. Is there any official body that I can go to for help?

NickX

Spidie wrote: »

Are there any rules about fair play..ie not rendering someone destitute?

I believe there are actually.

If you can demonstrate to them that you really need the funds for essential living expenses (rent, food, heating etc) then they are obliged to refund some\all of them.

You do need to speak to them as soon as you can.

Also do get a separate bank account set up to stop this happening again in the future.

Spidie

Yes, I am on the case about the separate bank account..
I have been speaking to them but they just say it's not their problem..I'll will keep at them..

fermi

Have a read through these links:

Setting Off Rules - DON'T bank where you’ve got debts

and

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/40/40_setoff.htm