Is this correct regarding debts

Bunster_2

Please can you tell me if this sounds right to you?

My partner has some debts, he has contacted CAB and national debt line, they have told him to start a new bank account and move away from the bank he is even though he has a loan with this back and a overdraft? Do you move your wages into a new one then negotiate payment terms, they have told him to stop paying his debts (which he does every month without fail), but then has no money left?

Thanks in advance

Numpty_Monkey

Yes thats correct

Banks can use money in an account to "offset" any debts
You need to open an account that isn't linked to any creditors

http://moneyfacts.co.uk/guides/money/who-owns-who-banks-and-savings/

Tixy

Hi Bunster

That does sound right. Moving to a new bank prevents the old bank from offsetting (ie taking all his wages to pay off the overdraft or loan leaving him unable to pay rent/food etc)

After this is set up have they advised a Debt management plan or repayment plan of some sort?

savingmummy

He is paying his debts without fail so to just STOP them will cause him problems. He needs to contact them and explain his situation and then offer a minimum repayment plan. IMO i wouldn t just stop paying the debts without contact first otherwise he will get into further trouble with defaults and debt collections. Are the debts credit cards etc OR just the loan and overdraft?

He may be better using a professional payment plan to do this for him!

Regarding the bank accounts, it is a good idea to open an account for wages so it dont get swallowed up from debt!! BUT he will need to keep money going in the old bank to cover the loan and overdraft each month!
This will help as most will tell you.

Bunster_2

Thank you, he has contacted the bank aboutthis and they don't want to know, I think because he hasn't missed a payment they don't care and wont set up a new plan (it's RBS) it is killing him though, he has no money left after he has paid the debts and it's causing some stress. He has a few loans but one of them is with RBS (who he banks with) that is who the current account is with and he has an overdraft with them, all his money is eat up by teh OD so if they took that off him he would be done for. He can't set up another current accout, I have a spare current account that I don't use, I am thinking it may be worth him transfering his wages into that for now and some of the DD's and writing to RBS pleading for help.

DVardysShadow

Bunster wrote: »

My partner has some debts, he has contacted CAB and national debt line, they have told him to start a new bank account and move away from the bank he is even though he has a loan with this back and a overdraft?

'even though' -> 'because' and you have got it right for reasons as the others have explained.

Numpty_Monkey

He should be able to open a basic bank account
this is from Bancruptcy board
http://www.moneymadeclear.fsa.gov.uk/pdfs/bank_accounts.pdf

You have done the right thing contacting CAB and National Debtline, did they suggest a DMP, or some anything

Tixy

He should be able to set up a new basic bank account with another bank - basic means no overdraft so no credit check.

You are right they are not usually helpful until he has missed payments. If he cannot afford minimum payments then he will end up defaulting on the accounts - CAB/national debtline should have explained this and its implications on his credit report.

I imagine they must have also recommened what he should do after he has the new bank account - do you know what this was?
In the meantime, once his wages have been transferred elsewhere this letter will buy him a month or so to set up a plan - http://forums.moneysavingexpert.com/showpost.html?p=21937969&postcount=52

Bunster_2

Thank you, really appreciate the help

El_Skinto

Hey Bunster

Get him out of RBS. I have had loads of trouble with them. We had banked with them for years and set up a business which we had to close down. It ended up with us owing them money for a loan, credit card and overdraft. Move bank asap as they took money from my account to pay the loan, cc and overdraft.

I got a basic bank account with TSB and BOS no problem.

RBS did the same with us they were no help at all and we are still having problems with them. We moved banks in July 09. They ignored our letters and calls of pleas of help. Honestly move away and let CAB deal with them as they just give you loads of stress. The only time someone listened is when it went to the solicitors.