Severe debt issues....

hayley21985

Hi, im posting here as advised by someone on the loan thread,
I am in debt to two pay day loan companies, this was the usual story of difficult circumstances and very fast snowballing of loan amounts.
I was unaware than pdl's could take money from an account even when a card is cancelled, so a sum of money was withdrawn from my empty account, meaning i was made very overdrawn at the bank and am accumulating their charges because of this.
I have tried to negotiate payment plans but they will not accept my offers, saying they are too low, they are due to remove the hold on my account and start collection activities.
The bank will not let me close my account as i am repaying a loan to them (no arrears) and because of the overdraft, im terrified the pdl's will just continue making me more and more overdrawn my wages should be safe as i have opened an account with a different bank for my wages to go into, however its too late for this month, so i will withdraw it in cash on payday.
If anyone has any advise i would be really happy to hear it.
I had criticism on the other thread for taking out such a loan, i feel thats really pointless as people in my situation are often desperate and already realise the consequence of their actions!

give_them_FA

No, you don't need criticism, you need help. How much are these leeches after? And in what way are they able to take money out of your account which isn't there? What are they using to do that?

i am wondering why it isn't possible to instruct your bank not to make further payments?

hayley21985

hi, i owe them £1540 (i know) i asked the bank, they said that most pay day companys have in their terms and conditions the fact that they can remove money from an account by any means possible, i have had some advise on the other thread i started, its all a little over my head but apparently they use all sorts of tactics, the bank said that as i had signed for the terms and conditions, they could not stop the payments

give_them_FA

This seems very strange. What bank do you have? It seems like nonsense to me. If you don't have an overdraft facility, why doesn't the bank simply refuse to pay?

To reduce it to absurdity, if you had signed an agreement to their terms and conditions saying that they could take £1,000,000 out of your account, would the bank let them have it?

It isn't your Bank's job to honour a contract you signed with a third party. If the money's not there, they should refuse to pay. Who in the bank has told you different?

Let's keep this thread on page 1, there must be a banking expert who can clear this up.

PHILIP1193

While i cant offer advice on what the pdl company can and cant do.

My advice is to pay them off asap as i needen say 2500% apr will soon mount up with bank fees. In an ideal worl da 0% 18 month credit card would do nicely, as you can pay them off and then repay the credit card over the 18 months but im unsure if you have the means to do this.

Regardless of your situation any credit card regardless of apr will be better than the ridiculous amount of apr the pdl companies charge.

Good luck

Phil

hayley21985

i spoke to the debt department of barclays bank and also spoke to a cashier and then an hour with an advisor who said that i would have signed an agreement allowing the crediotors to take the amount owed using any means, that the bank is powerless to stop them taking money that i owe to them, believe me, i argues this, but according to the advisor, the bank's hands are tied. Im so confused and exhausted by the whole porcess, i just do not know what to do, i really cannot see a way out of it.
I did apply for a 0% interest credit card, i got declined

nottoolate

http://conversation.which.co.uk/money/continuous-payment-authority-recurring-credit-card-payments/

http://www.moneysavingexpert.com/banking/recurring-payments

mellonicoley

What the bank means is that you would have authorised a 'recurring payment authority' (I think that's what it's called) which means the PDL companies can just keep draining your bank account.

You need to open an account somewhere else which isn't associated with your current bank - the Co-op has a good basic account - and then write to the PDL companies to arrange a payment plan. They're more likely to agree with it if they can no longer get hold of your money. Eventually Barclays will stop them from taking you further overdrawn.... eventually!

You said in the other thread that you can't close your account... well that doesn't stop you from opening a new account and not using the old one! But you will probably have to make some kind of arrangement to repay your overdraft.

hayley21985

i shall be opening a new account tomorrow, im just worried about the extent i will become overdrawn, its allready over £200 with my normal direct debits due to come out which will extend it, at the moment i have a reasonable repayment plan with the bank regarding the overdraft, dont know how sympathetic they will be if the pdl's withdraw more and more do you have any experience with wonga.com? i have debts with them and payday uk, payday uk have refused my repayment offer and are asking for an unaffordable amount, wonga.com never really reply.....

nottoolate

you can require the bank to cancel the authority and not allow any more to be taken. there were new regulations recently that mean they MUST do this.

http://www.moneysavingexpert.com/banking/recurring-payments

Step 2. Contact the credit/debit card company
You have the right to ask your debit/credit card company to cancel the payments if the retailer hasn't acted. Regulations now require the banks to sort this out, so they have to act.

If they fail to implement cancellation after you've asked, any payments taken after this are considered "unauthorised transactions". Some banks will instantly act, others not. Yet under the Lending Code it's then their responsibility to sort it out.
However, this can be drawn out, as banks may involve Visa, Mastercard or American Express, the companies behind the electronic payments process, in the process. Do record when you asked for the payments to be stopped as you want a full refund from that date.

Standingtall

You can also contact CCCS or Payplan for advice if this is causing you financial hardship. An option may be to put your PD loans and overdraft into a DMP.

My son is in the PD Loan trap and I have my own trouble with debt. On this section of the forum you will get support and advice so please keep posting as long ad you need to. Beware of the occasional insensitive type who may wonder over of course, but they are the exception not the rule:)