Halifax Overdraft Questions

Mister_Toad

What is an Overdraft classed as? Credit or a loan?

I was at the CAB as my overdraft has gotten way out of hand and I can't make the payments, but we don't know how to classify it.

Another question,

When I was on the phone to the bank (after I went overdrawn) the bank staff I spoke to looked at my account, and said rather curtly, that on my income, I "... should never have been given an overdraft of that size".

In my case it's an overdraft of £7500 on an income of £700 total per month. It just got bigger and bigger and now I'm broke.

They say they are taking the overdraft off me. That will leave me without a bank and my monthly pension will disappear before I can take a pound of it.

Any advice? How do I stand re the suggestion I was given an overdraft their computers say I couldn't handle in the first place?

rdchick

Hello!!

The only thing I suggest is get another basic bank account with no overdraft that is not related in any way to the bank where you have your overdraft and have EVERYTHING paid into that, then make a payment that you can afford to the overdraft to pay it off

xxx

Tixy

An overdraft is classed as an overdraft. Its a form of credit borrowing, as is a loan.

But specifically its also repayable on demand. Which means they have the right to recall the overdraft. Have they written to you to inform you that they are recalling the overdraft or did she just tell you on the phone? did they give a date in the future or is it immediate?

When does your pension next get paid in?
Do you have any other current accounts open (with different banks)?

You need to open a new account elsewhere (if you cannot get a full account apply for a basic bank account somewhere).
If you cannot get a new account opened and your pension payments moved to the new account in time then you might need to send a letter using your 'first right of appropriation' to allow you to specify that X amount of your £700 is needed for priority costs (rent, utilties, food etc) and that you need to withdraw that amount of money from the £700.

Once you have a new account you'll then need to arrange to start repaying the overdraft at a rate you can afford each month.

Mister_Toad

Thanks for the replies.

They said they will take it away in October, so I have a bit of space, but not much. I heard Halifax can be harsh, is this so?

I only have 2 creditors, a credit card and the bank overdraft.

Over the last 2 years, as my credit card maxed, I would sometimes go overdrawn yet be able to make a payment from my bank (raising the overdraft), and the card company responded by always raising my credit limit.

Tixy

Well at least you do have a bit of time then.

Presumably the card and the bank account are the same bank?

But the advice will still stand that over the next month or so you need to get a new bank account and arrange for any income you have to go into that account. Once your money is safe from them then you can try to set up an arrangement to repay the debt and arrange to pay by standing order from your new account each month. Don't be bullied into paying more than you can afford or so much that you don't enough left for priority costs. You might want to ask them to freeze interest & charges on the account as well. And if the cc is the same company you might want to do the same with that - ask for charges & interest to be frozen and close the account and pay back at a rate you can afford.

I don't think halifax are the worst to deal with, though every person's experience seems different. But if they can see you are offering all you can reasonably afford they may well agree to the freeze.

rdchick

Halifax have always been ok with me, I've only got debts with Halifax now.. they're a bank at the end of the day and they're making money off you - as horrid as that is just play nice and hopefully they will too xxx

elaine12022

echo the advice by others to open a new bank account, psychologically it will benefit you too. Living permanently in an overdraft is soul destroying. then you can hopefully negotiate payments with the bank to pay off the overdraft.

Mister_Toad

Again, thanks for the advice. I have confirmation I have a new bank account now, it's with a separate bank, I will put my income in there asap.

The credit card is actually a separate entity, I did get a tad addicted to the 'Clubcard' points the card company always sent me when I spent certain amounts.

I hoped to be working before it got to this stage, but the markets have put paid to that for a while.

Anyhow, I hope they'll cooperate and let me work the debts down without being miserably poor.

I do own 2 dogs, they need around £120 a month in food and prescriptions. Will a creditor have any right to say I must sell the dogs (I won't, but can they ask) ?

I also care for a family member with severe mental health issues, and I often drive them around a lot to get them out of the immediate environment up into quiet countryside areas, it has prevented countless hospitalization otherwise. Of course this means I have a hefty fuel bill for someone supposedly not working and commuting - again, can a creditor say I stop doing this to set more money aside for the debt?

Appreciating this help folks..

Tixy

No - well they might try to say anything but you don't need to pay any attention to them. Actually banks tend not to be too unreasonable in terms of your expenses etc (they don't like £4k holidays on benefits etc) but don't tend to be stupid about your outgoings. If at some point your debts were passed to a debt collector they tend to be a bit more difficult but the key thing is not to let them bully you with that sort of nonsense.