Changing Bank Accounts - In my overdraft

Hownowbrowncow

Hello

I wondered if anyone could help me with a few questions.

I was going to do a dmp but the advisors discussed a few other options with me as im feeling a bit wary about doing one.
I currently bank with lloyds tsb and have an 0verdraft of £3000 which i go into every month, an advisor from payplan said that it may be worthwhile me opening a new bank account, getting my wages put into the new one and then calling lloyds to offer them a monthly payment to pay off my overdraft, this will stop them taking the full amount each month and give me a chance to get out of the overdraft, has anyone done this before? Is it legal? Without being on a dmp plan? :eek:
Also how long does it take to set up a basic account if i was to open one in branch, does it take long?

lindann_2

co-op and Yorkshire bank have a basic account, not linked to any other bank, payplan always advised to do this. We did it taken us few days.. they did check up that we had problems, this what they offered hubby, as he had a passport only..

We was with RBS, first thing in the morning we drew out what we could until our funds was paid in to that account. Then let write to lloyds to tell them you having problems on a dmp, if you are with Payplan even better, they will help you deal with this.. but best of luck l read lloyds they can be bit tough, also they may pass the debt to a debt company.someone here will advice you better

Hownowbrowncow

Thanks for your reply Lindann :D
I should have explained myself a bit better. Payplan said that i could maybe not do a dmp but carry off paying my Credit cards as usual but just change my bank so that they cannot take the full payment every month, but to call them and arrange to pay them monthly by standing order, i wondered if anyone had done this before?
How long did it take for you to set up the new bank account?

Hownowbrowncow

Can anybody help?

timbstoke

I've done this - kind of. I haven't made any agreement with my bank, but then they haven't attempted to reduce/remove my overdraft either. All I did was open an account with another bank, then I make payments each month to the overdraft in the same way as every other debt.

On one hand, it's a little counter-productive, because it means you're paying interest on your overdraft for all of each month, rather than paying it off every month and then eating into it again. On the other hand, it takes the overdraft out of the 'spending money' pot, which psychologically is a massive help when you're trying to pay it off.

Edit: Just noticed the reason for changing banks is to stop them taking more than you want them to under offsetting rules. I haven't done this, but it is entirely legal, and sensible to make sure you have enough money to live on. With the more unscrupulous banks, depriving them of the ability to just 'take' your money without your permission can also be the only way to make them listen to reason.