saying hello :(

emmah89

hi.

i am in serious debt. As a student, I managed to get a £2000 overdraft with one bank, and £500 with another bank. Being stupid I didn't look to the future and managed to always be at my overdraft limit. I always relied on the student loan when was coming in to bring me back from my limit. Now however I have no student loan coming in and have got myself into horrendous difficulties. The smaller overdraft is currently being reduced by £50 a month, and the other overdraft is over the limit by several hundred pounds. I am rather stressed by the whole thing. I have a job, but only part time and due to bills etc I just cant see a way out! Just thought I would introduce myself and hope someone could offer me any advice (if there is any!!)

MattSS

Hi emmah89.

You're going to get asked for an SOA. This will give you (and everyone here) a better understanding of where everything stands and will mean people can see where you might make cutbacks and improvements to pay off your overdrafts faster.

One quick observation from me though. If you are over the limit on your larger overdraft does this mean you are incurring further charges on it? If so you probably want to switch to paying that off if it is costing you more. Might seem sensible to get rid of the smaller one and only have one overdraft but the right course will surely be to attack the one that is costing you the most money.

Tixy

Hi and welcome

Are you still using one of these accounts as your main bank account? if you are you need to set up a new bank account elsewhere to have your income paid into. Then I'd advise you to work out how much in total you can afford to pay off the overdrafts each month (after essential bills etc).
Have you been in contact with the 2 banks and tried to come to an arrangement with them yet at all?

Depending on yoru finances it might be that you want to write to both and offer a small payment each month, and ask them to freeze interest & charges (although this will probably affect your credit file).

MattSS

SOA calculator here: http://www.makesenseofcards.com/soacalc.html

Really straight forward so dive right in. Spend some time trying to get the figures as accurate as possible using online bank statements etc. to plug in the figures

MattSS

Oh, and what Tixy said, definitely make sure you have a separate main bank account

emmah89

hi. at the moment, the bank with the smaller overdraft is the one ive been in contact with and the reduction was agreed at £50 a month. im absolutely terrified of contacting the other bank, because its so much money and im scared what they will say!!
matt- how would i work that out with the other bank though? surely they would say ive an agreement in place?

emmah89

will complete soa thing

MattSS

Ah, if it is an agreement with the bank you've made it might be more difficult to change.

Is it just the fifty pound each month you have spare?
What can you afford to pay towards the other overdraft?

The SOA will make all this more clear and you can then proactively approach the second bank with a clearer roadmap forward

thechippy

Simplest thins to do is open another bank account to have wages etc paid in, which is unrelated to the other two (otherwise, they could use the right of offset)

You then offer these a realistic amount each month to clear the debts.

Edit.

Any existing agreement can still be re negotiated.