help and advice on overdraft and payday loans

ohhappydays

Hi All,

I won't beat around the bush I'm in dire trouble and don't know where to go or what to do, I'll try and be as brief as possible with the problems.

It is really my son who has the problem, last year I found that he had borrowed from payday loan company's the sum in total of £9k plus an overdraft with his bank for another £2k, he was under heavy pressure to pay these off and as you can imagine the house phone was constantly bombarded with calls for the loans to be paid off, I decided the only way out was to borrow the money myself and get all the debt's cleared to give him a fresh start. The bank involved is Nationwide, they actually phoned on a saturday morning and demanded that the whole amount was paid immediately and we agreed and asked them to close the account, this is where it all went wrong, for some reason they decided not to and I'm sure you know what's coming next they continued to give him overdraft facilities and once again he has in the space of a couple of months got into debt with them to the tune of over £2k, plus taking out more payday loans so he has money to pay his keep and money to live on etc.

I have phoned the bank to arrange a meeting to discuss the situation but not sure of our rights but as you can imagine I'm furious with them and I will close my account plus my daughters saving account in disgust, I know they wont take any notice of my actions but I can't carry on being a customer after all this, what I want them to do is freeze the amount he owes while I find the best way of dealing with it, from my perspective I feel they have acted without due care to one of their customers knowing that he was awful managing his financial affairs they allow him even more credit and just keep piling on charges knowing he can't pay them.

As far as they payday loans go I don't think I have any alternative but to pay them off again myself.

Obviously we have had a lot of heartache over this but we will stick together as a family and get through it, my son is no angel and I suspect behind all this is an addiction to gambling, but like most addicts he denies it. On a plus side he does work although only at the basic rate of pay and we have agreed for me to take over his financial affairs, he has agreed to hand over all his wages on payday and I'll just give him enough to run his car (and a small amount of spending money) as he works shifts and needs it for that purpose, already handed me over all his cards so he cannot use them any more. Is their anyway of him being able to register anywhere so he cannot get any loans or credit? As you can imagine all the payday loan company's that he was in arrears with are now bombarding him with offers of more loans! a couple of month's ago they were threatening all sorts and whacking the interest and default notices on like there was no tomorrow.

I'm retired on ill health and only have my DLA and a small occuptional pension so money is tight, I would appreciated any advice on how to go about this, many thanks for your time reading all this.:(

dancingfairy

Hi - I'm not sure you paying off the payday loans is a good idea - especially if you are taking control of his finances - if as you suspect he has an addiction whether it be gambling, drugs, fine wine, whatever he will only go and run up the pay day loans again - you have paid them off once and it hasn't worked has it?
He needs to get a new bank account that the payday loan people and people he owes money to won't have the details of and set-up a repyament plan with them. He needs a new basic bank account first otherwise they will rinse his account and leave him with nothing- with a seperate account he can set up repayment plans.
He needs to realise he has a problem and get help from one of the debt charities as it has potential to rip families apart and if you pay his debts and he refuses to pay you will be left with them in your name which will cause you more problems.
Get him to a CAB or get him to phone National Debtline or the Consumer Credit Counselling Service (CCCS).
df

lvm

Don't pay the debts a second time.

I was pretty much in your son's situation a few years ago and my parents paid all my debt off for me (about £12k I think). And I pretty much ran it up again. As of 2 months ago I had about £10,100 debt on credit cards, all defaulted and with Debt Collection Agencies. Thankfully I've never had a payday loan.

Anyway, I've now sorted repayments back on all debt on my own, wrote to creditors offering payments, cut right back on spending and am doing very well for myself. I'll be debt free by the end of this year.

The fact I have to pay this myself is actually showing me the consequences of spending money I don't have - I'm just looking forward to when I have all the money to myself and not paying back debts.

Dancingfairy is right - your son will just get more payday loans and find other ways to get money if he knows you will clear them off again.

I would say either contact CCCS or write to all loan/credit card companies yourself (probably in his name though) and get interest frozen and decide how much he can afford to pay after his dig money, food etc.

Honestly, the worst thing you could do is pay this again!

lauzt1987

You're furious with the bank? You should be furious with him. As long as you keep bailing him out, he'll keep getting deeper and deeper in to debt. He needs to hit rock bottom and see for himself that he needs to chnage his life, and he will never do that if you keep paying debts off for him. Sorry to be so blunt.

saltnvinegar

Hiya

I think what your son needs is professional help to deal with the reasons why he is getting into such debt in a short space of time.

If you believe your son has a gambling addiction, then paying off this debt is not going to help him, or you............

All that will happen is the cycle will continue to the point where he ruins you financially as well as himself.

The best thing you can do now is support him as a parent by giving guidance, advice and emotional support but this cannot extend to paying off his debt. You have already done this once, and within a few months he is back in the same situation so he has learnt nothing except that he can rely on you to bail him out.

He needs to learn to face up to the consequences of his addiction, and this is one of those consequences.

I understand your anger at his bank, however he is an adult, and responsible for his own actions, and that is the way they will see it. They are also seeing the £££ signs as you have just made them a load of money by paying off his debt so of course, being the profit driven leeches that they are, they will continue to lend your son money while he is adding to their wealth through interest and charges!!

Although he has agreed to hand over control of his finances to you there is still nothing to stop him opening another bank account and running up more debt with overdrafts and payday loans. If he has a gambling addiction, then this will happen sooner or later unless he gets to grips with this.

I know its very difficult, but you need to get him to see this and address this issue as a priority otherwise you will only end up in the same situation in 3 months time.

Very Best

SnV

bargainbetty

I'm sorry to be so harsh, but what others have said here is true. Your son will never accept responsibility for his actions until he is forced to do it, and as long as you keep bailing him out, why should he?

It is not down to the bank, it is down to him. He must take the situation and get it under control. Help him with mental and emotional support by all means, but do not hand over another penny. Until he faces his problem, it will happen again. I did this recently with a friend, who openly admitted he sometimes felt he could take stupid risks because he knew I would bankroll him for a month or two if it went wrong. Now, if he needs anything he gets a bare minimum and unless it is paid back there is no more.

Good luck x

ohhappydays

Thanks for all your advice and I do hear what you say but with regard to the bank they should have acted on instructions to close the account so they do have to bear some responsibilty.

ohhappydays

9 months on and thought I'd let you know how it's all panned out so far.

First the bank, surprising to a lot of you but I not only got the bank to back off but they cancelled the debt of over £2500 pounds and agreed with me that they had a morale obligation to safeguard his interests once they had been made aware of what was going on and that was evident from the outset as they could see all transactions etc, so don't be afraid to take them on as it is possible to win.

Secondly, amazing results by just contacting mobile phone companies etc and just telling them that I was cancelling the contract because I could no longer afford to pay as I simply did not have the funds to do so.

Thirdly, I went to the CCCS ( Consumer Credit Counselling Service) and they advised filing for a DRO with the Insolvency Service which we did and thank god for the CCCS they guided us through every step and we were constantly on the phone to them sometimes 5/6 times a day, in fact often calling us to check that all was going ok, at the final stage they submitted the application on our behalf online and all we had to do was take the letter of confirmation to the Post Office with a barcode attached and pay the fee of £90. job done simple as that.

Suddenly out of the blue last week we received a text message demanding we contact the number given to avoid further action on our home address within 4 hours or face the consequences, oh great I thought here we go again so I rang the number to be answered by a very aggressive person threatening to come to our house at 4pm that same day and take goods to the value of the debt(he never mentioned who the debt was payable to or the amount) I informed him that it was subject to a DRO and he just laughed saying they take no notice of any type of debt management arrangements, I tried to explain that this was the Insolvency Service and we are protected by their service. A quick call to the Insolvency Service at Plymouth and the CCCS and surprise surprise we heard no more although we did point out that any more contact and we would report them to the Financial Ombudsman, apparently the fines they can impose can be very severe. It turned out that this was just a debt recovery firm that somehow found out and didn't check properly although how they got my mobile number is a mystery. We now have just got to wait until April next year and after that time all should be ok again.

My son has had to accept that for the foreseeable future I control his life(financially at least) I dish out pocket money as I see fit and also open all his mail to which he agrees to or he no longer can stay at home, emails he is not allowed to open either, I check daily to make sure he doesn't as believe it or not the same company's still bombard him with offers of loans, obviously these payday loan outfits are making far too much profit to stop them carrying on. My son went to various gambling counselling services and sadly I have to say they were as much use as a chocolate teapot, instead we got him a 12 session counselling course through the CAB, he fully understands that he has to change his lifestyle and so far so good as he knows I will no longer bail him out and that's the only way he can remain in the family home.:)