At what point will a bank "set off" your borrowings again your current account?

anna_d_2

This is not for me (honestly!) - but at what point will a bank make a "raid" for want of a better word on your account?

Someone I know has had a default notice - they are contacting their bank asap to try and make a repayment plan but hold an account (joint with their partner) with the same bank.

Does the fact that it is a joint account make a difference?

Advice would be welcomed please?

National_Debtline

Hi Anna

There is a principle sometimes referred to as "two into one won't go". This means that in the situation you describe, the bank should not offset credit funds in a joint account against an overdraft in the sole name of one of the parties.

This is not to say it doesn't sometimes happen, but where that is the case a prompt complaint usually results in the money being credited back to the joint account.

Please note that if the situation were reversed, and there was an overdraft balance on the joint account but a sole account with the same bank was in credit, then the bank could offset that credit balance agaisnt the joint overdraft, as both individuals are regarded as jointly and severally liable for the debt.

When exactly such an offset could be made is harder to predict. Prevention is better than cure, and so we would always advise those whose money might be vulnerable to open a basic account with a bank they owe no money to ASAP.

Hope this helps.

anna_d_2

Thank you.
The person in question has just informed me they have spoken to the bank, made an arrangement to pay and the default has been lifted (think it was a "notice to impose a default" notice they may have received).

I will advise them re: a basic bank account when I next speak to them.