Unemployed-Bank requesting £2000 overdraft to be paid in full..Help??

meer53

osborn99 wrote: »

I hear your pain Samuel. I had an overdraft with Abbey for £1200, they sent me a letter in December saying they are cutting my overdraft to £300 and I have 30 days to pay. They passed the debt to a debt recovery service and we set up a payment plan.

Just a warning to everyone to think twice before getting an overdraft.

Overdrafts are really useful to have. The mistake people make is that they think it's a loan, to be spent.

An overdraft is normally to be used as a buffer for emergencies and if banks can see that this is how you use it, they're quite happy for you to keep it. Using it to the maximum every month shows you're spending more than you have coming in. Use it how it's meant to be used and you'll have no problems.

bbfc

osborn99 wrote: »

I hear your pain Samuel. I had an overdraft with Abbey for £1200, they sent me a letter in December saying they are cutting my overdraft to £300 and I have 30 days to pay. They passed the debt to a debt recovery service and we set up a payment plan.

Just a warning to everyone to think twice before getting an overdraft.

That's very harsh sending to a Debt Collector!

When I was in Uni I had a student overdraft that I was always in, even though I worked over 30 hrs a week (more than I should of done), I just spent too much!

Every year they were happy to renew it and it went up by £250, reaching £1500 in my Final Year. Sometimes when I called the bank for various reasons they would ask when I was going to pay it back, which I found odd at the time. The problem was my pay (around £800-£1000 p/m [a lot for a student!] depending on how much overtime I did) would clear it and then i'd be straight back in it.

When I left Uni my O/D was £1500 and was transferred to a Graduate Account (still 0%). After a year, and still not clear of it, HSBC sent me a letter to say they would not renew my O/D facility and that it would be removed on a certain date. I called them up and set up a repayment plan of £120 p/m. Basically every month they reduced the limit by £120 until it was clear. It took about a year but it was probably the best thing they did. Now I have no O/D and I never want one again. I used to feel sick withdrawing money that wasn't mine.

zenmaster

From experience, Nationwide are not too bad in many respects.

Give them a call, explain everything to them and they will put you on a reducing balance, i.e. if you are paying £50 per month your overdraft will be reduced by that amount each month. If they don't suggest this, then ask. The trick here is

• Be realistic about what you can afford each month
• Make those payments without fail
• Try to get a month or two ahead of the game to give you a safety net

If you fall behind they will charge late payment fees.

They are not at all unpleasant to deal with so don't be concerned about calling them.

The cashminder account is a brilliant move. Pay everything you have into that, pay your dues and whatever is left over is yours. Not a penny more nor a penny less.

It will teach you all about budgeting. A harsh lesson but one well worth the learning.

Anthorn

meer53 wrote: »

Overdrafts are really useful to have. The mistake people make is that they think it's a loan, to be spent.

An overdraft is normally to be used as a buffer for emergencies and if banks can see that this is how you use it, they're quite happy for you to keep it. Using it to the maximum every month shows you're spending more than you have coming in. Use it how it's meant to be used and you'll have no problems.

Oh here's something I can agree with. I think most people think it's money to spend. At least everyone I know and that's rather a lot of people, think so. What they don't realise is that sooner or later the bank will want their money.

btw in my previous post where I wrote "overdraft" I did of course mean "overdraft limit" and I still don't understand how a bank can possibly justify providing a £2,000 overdraft limit for anyone who has negligible income!

bbfc

Anthorn wrote: »

Oh here's something I can agree with. I think most people think it's money to spend. At least everyone I know and that's rather a lot of people, think so. What they don't realise is that sooner or later the bank will want their money.

btw in my previous post where I wrote "overdraft" I did of course mean "overdraft limit" and I still don't understand how a bank can possibly justify providing a £2,000 overdraft limit for anyone who has negligible income!

Student Accounts with most banks offer these and most students don't work while they are at university. I did and worked too much, which impacted on my studies, but I had to work otherwise I could not afford it. I have friends who went to uni and were funded by their parents; their overdraft was paid off every month by mommy and daddy.

I think it's on the understanding that as a student and then graduating, you will end up with a highly paid Graduate job, and you pay the overdraft back.

seriousDFW

bbfc wrote: »

Student Accounts with most banks offer these and most students don't work while they are at university. I did and worked too much, which impacted on my studies, but I had to work otherwise I could not afford it. I have friends who went to uni and were funded by their parents; their overdraft was paid off every month by mommy and daddy.

I think it's on the understanding that as a student and then graduating, you will end up with a highly paid Graduate job, and you pay the overdraft back.

Indeed. No-one tells you quite how difficult this can be. I ended Uni with a £1,750 overdraft and credit cards. I had a good degree from a good university, but it's taken 5 years after graduating to be able to get myself in a position where I will hopefully be debt-free soon. I too worked a lot at uni, but as my parents were considered 'well-off', I got much less student loan than others, so my extra earnings didn't go far. So while I ended uni with lots of credit card debt, my student loan is probably less than others.

What I would say is that I completely agree with the advice to learn to budget. I wish had known at uni how to budget properly, as I think I would have been able to not get myself in such a mess. As it was I was in my overdraft by October of my first year, and didn't leave it properly until 4 years after graduating.

lisyloo

I just can't see the bank accepting £50 a month though.

There isn't a lot they can do if you don't have the money, so there is no need to panic. I understand it's worrying, but if people don't have it they simply can't get it.

Anthorn

meer53 wrote: »

I can only comment on where i work but i would imagine most banks operate using the same principles. Where a customers only income is benefits, even if they are using their overdraft facility to the maximum or are even in excess of it, we cannot use benefits to reduce this. If an account is frozen, we make arrangements for the customer to withdraw their benefits.

As for your overdraft, have you asked for an increase ?

Apologies for my late reply: I only just noticed it.

I meant overdraft limit.

I know for a fact that banks do take benefits to pay off overdrafts. Back in 2008 I was made redundant and received a small redundancy payment because I was only with the company for 6 years due to a job change. Redundancy payments are not counted as savings by DWP so I went on JSA. Anyway to cut a long story short when the redundancy payment was gone around 8 months later I was perpetually in overdraft and JSA credits into the account were deducted from the balance which was overdrawn.

Hats off to Alliance & Leicester / Santander though which stuck by me during the bad times and are now reaping the rewards now my situation has improved! My posts show that I'm no lover of banks but I have to say that given a reasonably decent account history they do tend to bend over backwards to help.

meer53

Anthorn wrote: »

Apologies for my late reply: I only just noticed it.

I meant overdraft limit.

I know for a fact that banks do take benefits to pay off overdrafts. Back in 2008 I was made redundant and received a small redundancy payment because I was only with the company for 6 years due to a job change. Redundancy payments are not counted as savings by DWP so I went on JSA. Anyway to cut a long story short when the redundancy payment was gone around 8 months later I was perpetually in overdraft and JSA credits into the account were deducted from the balance which was overdrawn.

Hats off to Alliance & Leicester / Santander though which stuck by me during the bad times and are now reaping the rewards now my situation has improved! My posts show that I'm no lover of banks but I have to say that given a reasonably decent account history they do tend to bend over backwards to help.

I think you'll probably find that things have changed a lot in the last 4 years in banking.

Most banks now have to show that they're "Treating Customers Fairly" and things like benefits payments and offers to repay debt have become one of the things that they've had to ease up on. Previously, where a bank could state what the repayment offer should be. Now, if all a customer can afford is £1 a month, they have to accept it.

You're absolutely right about them helping though. If you're upfront with your bank if you do happen on difficult times, and you don't stick your head in the sand, most banks will negotiate with you and help you to come to some arrangement. The people who have problems are usually the ones who don't respond to letters or phone calls from their banks and who don't address their problems quickly.

bbfc

seriousDFW wrote: »

Indeed. No-one tells you quite how difficult this can be. I ended Uni with a £1,750 overdraft and credit cards. I had a good degree from a good university, but it's taken 5 years after graduating to be able to get myself in a position where I will hopefully be debt-free soon. I too worked a lot at uni, but as my parents were considered 'well-off', I got much less student loan than others, so my extra earnings didn't go far. So while I ended uni with lots of credit card debt, my student loan is probably less than others.

What I would say is that I completely agree with the advice to learn to budget. I wish had known at uni how to budget properly, as I think I would have been able to not get myself in such a mess. As it was I was in my overdraft by October of my first year, and didn't leave it properly until 4 years after graduating.

Same here. My parents earned well over the threshold but i'm not an only child and they had a mortgage and bills to pay also. I lived in my O/D for my entire uni life and like i said, it was usually cleared every month with my pay and then I would be back in it. Every time the bank called I was scared they were going to ask for it all back, but they didn't, well not until a year after I graduated.

Getting rid of it was probably the best thing I did and I thank the bank for removing it as I was a risk to them. I went over it a few times and there were no charges (as it was a student account) though once they did try to charge me over £100 in arrangement fees, but they refunded them when I called them. I've learnt my lesson about overdrafts and I never want one again.

The only issue I have had with my bank is that they charged me arrangement fees once without telling me they were doing so (they had a right to because I had gone over my limit) but they were in breach of their fair fees policy (which stated that they would contact me within x days to tell me they were charging me), so I called them up and they refunded them as a one-off gesture of goodwill. After that I never went over my limit again.