Lloyds Account Overdraft - Advice needed

jediknight49

My wife has an old Lloyds bank account. She has not used it in well over 3 years. The account originally had an o/draft facility of approx £500. The account was mainly used for paying direct debits (she had another bank account for her wages to go into)

Around 3 1/2 years ago, she got into financial difficulties due to loosing her job. A DD was declined due to the OD being maxed out, and Lloyds charged her £20 for the max period allowed of 12 days (£240 in charges). Obviously this sent her well over the £300 limit. Lloyds agreed to extend the OD to approx £750 to help "ease" the pain. Anyway, the same thing happened the next month, and again, another £240 of charges was applied, making her approx £1000 overdrawn.Since that day, she has never used the account, and although she now has a job, she is still struggling financially.

Lloyds agreed to suspend any interest on the account for 6 months, and after this offer expired, i requested that they do the same again, which they agreed to. Over the last 2 years, i have taken on the debt to help her, and I have been paying amounts of approx £20 per month into the account to try and clear the debt for her, but around 12 months ago Lloyds introduced a £5.00 monthly fee on the account, and stated to add interest back onto the account. For every £20 i pay, they take off over £11 in charges, which is crazy and very frustrating.

I have spoken to them many times to argue the fact that the account is not used, will never be used again, and why should she pay a fee? They say that as the OD is active, then a fee must be paid. I have also asked for the interest to be suspended, but they have declinded because they have already helped her in the past, and are unable to again. According to Lloyds, the only way for interest to be frozen is if she goes into a debt repayment scheme, but as she is now under her agreed £500 OD limit, she can not make an arrangement with them!

Is there anything that she/we can do to get this sorted where whatever I pay into the account actually comes off the debt? It's no fun paying £20 per month, only to see around £9.00 of it come off the debt owing. She now owes £380.

I have spoken to Lloyds until I am blue in the face, but it's like banging my hand against a brick wall. They will simily not budge. We want the debt clear, we want to be debt free and we want Lloyds to get their money back, but in the current situation, it will be a few years before any of this is achieved.

Any help or advice by people who now what they are talking about would be really appreciated.

Thanks

YorkshireBoy

You're not going to get anywhere with LTSB, so you should focus your efforts on other things.

Earn more (overtime, 2nd job, sell stuff, etc...that means both of you!)
Spend less (can you?)
Borrow from family
Restructure the debt...

Can you, or she, get a 0% on purchases credit card and spend your way out of the overdraft by putting your shopping, fuel, etc on this so her overdraft naturally, and rapidly, decreases? Obviously you're only buying time, but at least you'll cut out the interest meaning more of your cash goes towards the debt.

If you have a reasonable credit rating yourself, the Virgin credit card will pay 0% cash into her account for 20 months for a 4% fee.

Saints2011

jediknight49 wrote: »

My wife has an old Lloyds bank account. She has not used it in well over 3 years. The account originally had an o/draft facility of approx £500. The account was mainly used for paying direct debits (she had another bank account for her wages to go into)

Around 3 1/2 years ago, she got into financial difficulties due to loosing her job. A DD was declined due to the OD being maxed out, and Lloyds charged her £20 for the max period allowed of 12 days (£240 in charges). Obviously this sent her well over the £300 limit. Lloyds agreed to extend the OD to approx £750 to help "ease" the pain. Anyway, the same thing happened the next month, and again, another £240 of charges was applied, making her approx £1000 overdrawn.Since that day, she has never used the account, and although she now has a job, she is still struggling financially.

Lloyds agreed to suspend any interest on the account for 6 months, and after this offer expired, i requested that they do the same again, which they agreed to. Over the last 2 years, i have taken on the debt to help her, and I have been paying amounts of approx £20 per month into the account to try and clear the debt for her, but around 12 months ago Lloyds introduced a £5.00 monthly fee on the account, and stated to add interest back onto the account. For every £20 i pay, they take off over £11 in charges, which is crazy and very frustrating.

I have spoken to them many times to argue the fact that the account is not used, will never be used again, and why should she pay a fee? They say that as the OD is active, then a fee must be paid. I have also asked for the interest to be suspended, but they have declinded because they have already helped her in the past, and are unable to again. According to Lloyds, the only way for interest to be frozen is if she goes into a debt repayment scheme, but as she is now under her agreed £500 OD limit, she can not make an arrangement with them!

Is there anything that she/we can do to get this sorted where whatever I pay into the account actually comes off the debt? It's no fun paying £20 per month, only to see around £9.00 of it come off the debt owing. She now owes £380.

I have spoken to Lloyds until I am blue in the face, but it's like banging my hand against a brick wall. They will simily not budge. We want the debt clear, we want to be debt free and we want Lloyds to get their money back, but in the current situation, it will be a few years before any of this is achieved.

Any help or advice by people who now what they are talking about would be really appreciated.

Thanks

From what I see Lloyds have been more than helpful whereas other banks or building society's might not entertain freezing interest on two occasions, stop dwelling on this point.

You need to throw more money at this debt, Lloyds are within there rights to introduce the £5.00 charge. It's not going away.

Thrugelmir

Saints2011 wrote: »

You need to throw more money at this debt, Lloyds are within there rights to introduce the £5.00 charge. It's not going away.

Still costing Lloyds money to administer their account. So seems reasonable to charge to fee until such time as the original debt gets repaid.