Son over his overdraft

JollyJules_2

Please can anyone advise what my son should do he is well over his overdraft with mounting charges and no job. He has a mortgage of 380 a month for a small terraced house. He has been unable to claim JSA because his girlfriend was with him for the past 6 months but she has now left. He has an appointment with the Job Centre today and hopes he will get Housing Benefit. The main concern is the overdraft with LTSB which is over the limit plus charges which are mounting by the day. how can he deal with this? He has asked them to suspend his account because of his circumstances but they have refused. What does he do? Worried mum

Dinah93

He needs to look at other ways of getting money fast and getting to a point where he has money coming in to balance the essential payments. Get a lodger, sell old CDs and books and DVDs to amazon or music magpie, sell anything he can on Amaon. I suggest he also draws up a statement of affairs and posts on here x

dancingfairy

O.K what's generally recommended is to get a fresh bank account away from the people you owe money to - then get all benefits paid in there and pay all bills from there. This basically means he will be in control of his money. The banks are not allowed to take people's benefit money to pay off debt but if it's all going in to the same account then it's going to be very difficult to sort out.
From his new bank account he should then set up a standing order to the overdraft - even if it's just 1 pound for now (as that's all he can afford). He needs to write to the bank with his circumstances - tell them that he will send them 1 pound per month until his situation improves and ask them to stop charges and interest- eventually they should do this but he should pay them each and every month even if they never officially accept his offer. It may take them several months to stop interest and charges and they don't have to do this but this is the best option really.
Whatever he does do not allow the bank to 'sell him' a loan or give him more borrowing as this just exacerbates the problem and stores it up for later and they may well try and give him a secured loan which if he doesn't pay would put his house at risk.
While it is an unsecured loan there is a lot less that the banks can do about it - hence why they are likely to try and get him to take out a secured loan.
df

GeorgeUK

I would suggest he contact one of the free debt charities (CCCS or Payplan).

Hopefully once he gets sorted with the job centre, he will be able to see exactly what benefits he is entitled to.
http://www.entitledto.co.uk/

dancingfairy

Oops - forgot to say obviously he needs to get the benefits sorted as soon as possible. I can't see why he can't claim JSA though? surely he should get it if he's unemployed bsaed on his contribution record - assuming he hasn't got enough NI contributions or he's had his 6 months then it would go to income assessed job seekers and surely if he's the only one in the house /paying the bills then it would go off his income and he would be entitled to it?
Perhaps the job centre can also help with a crisis loan in the very short term until all the benefits are sorted.
df