how do i clear overdraft in dormant bank account?

dandan1987

hello all im newbie to here as a user but find the site very usefull and interesting, i have recently swapped bank accounts from halifax to tsb during the swap though i have a authorised overdraft of £600 which i am £572 into, i am unsure what to do as i cannot afford to pay it back all in one go, my question is if i ring them do you think they will accept a monthly payment or are they going to want it all in one go? alternatively is there any other course of action i could take? many thanks for listening

Tixy

Have they actually recalled your overdraft and asked you to repay the full amount?
If not then I would just set up a standing order from your new account to the old one for an amount you can afford. No need to bring it to their attention at present.

If at some point they notice the account and see its not being used they might recall the OD and ask for you to repay. At that point you would need to write to them to set out your payment proposal - at that point it could impact on your credit file if you cannot repay it straight away.

dandan1987

i had a letter from tsb saying they had tried taking it out of my lloyds account but did not have enough in there so they wrote saying that once i have repaid the overdraft to notify them to close my account so i am guessing if i set up a standing order and do like you said then just see if i have and other letters regarding the overdraft, many thanks for your reply tixy!:T

d3mon4ngel

You've moved from Halifax to Lloyds TSB? These are now part of the same overall company. They might be able to invoke the right to set-off (or offset... can never remember which way round it is!), in which case they could simply take money from your new account for the amount outstanding on the old one. My advice would be to open a completely unrelated bank account just in case.

dandan1987

i thought they were, reason being was so i can easily transfer money to my partners account and family as they are with lloyds too, no i have realised halifax have just started doing that now anyway with transfers to other banks in 2 hours, so you think i should set up a bank account that is not related to the lloyds/halifax group? thankyou for your reply

Tixy

You would only need to set up a bank unnconnected with lloyds/halifax if you have debts you are struggling to repay (including this overdraft) and had moved bank to protect your wages from off setting.

If your only reason for moving is for the ease of doing transfers then it shouldn't be an issue to keep with this new account. You would need to be aware that as demon says if they do recall your overdraft and you cannot repay in 30days then they could take funds from your new account to clear it. Hopefully if you can repay if fairly quickly this shouldn't become an issue.

d3mon4ngel

dandan1987 wrote: »

i thought they were, reason being was so i can easily transfer money to my partners account and family as they are with lloyds too, no i have realised halifax have just started doing that now anyway with transfers to other banks in 2 hours, so you think i should set up a bank account that is not related to the lloyds/halifax group? thankyou for your reply

In my limited knowledge and experience, I would suggest that might be for the best. However, bear in mind that I am a relative newbie in all of this so others might be able to advise otherwise. The general advice is normally to bank away from the institutions where you have debts, and this "dormant" overdraft is a debt with the Lloyds group.

I'm just thinking that you said you couldn't afford to pay it all back at once, but they might see (for example) £800 wages go in and think "that'll do nicely" and leave you with sod all for the rest of the month. I'm not saying that they would definitely do this, but it is a possibility. If you bank away from the Lloyds group, then they would not be able to do this.