Banking where you have debts

jim-jim

Hi, me and the other half have got defaults on 3 Barclay Cards plus a Tesco. At the moment we are ignoring all the letters ( I know not a smart move). Total owing 17K
We have our mortgage with Barclays (up to date) But we also have 2 current accounts with them that are overdrawn.
1 account OD is 400. plus 250 reserve trying to get that down, but then charges come off and then back into reserve.
2 account limit 2200. plus 500 reserve only!! OD by 1700. Trying to pay that off at 50.00 per week.

We wanted to try and clear all of this before doing a DMP.
When we get the accounts clear can they then take money from us to cover the C.C. but not when the accounts are overdrawn.

At the moment wages get paid into account 2. Tax credits into account 1. That is enough to cover the mortgage.

Is this the best way to carry on or to open a COOP basic account for T.C. to cover the morg. and have the DD come out of the coop when the account is cleared.

Thanks for any advice x

Growurown

jim-jim wrote: »

Thanks for any advice x

Personally I would open a new bank account and chuck the overdraft onto the DMP rather than struggle to pay it off before you start.

jim-jim

Thanks for that.
Would you open 2 accounts ? 1 for bills and 1 for every day use.
Not that I would have anything to spend everyday.

x

Growurown

jim-jim wrote: »

Thanks for that.
Would you open 2 accounts ? 1 for bills and 1 for every day use.
Not that I would have anything to spend everyday.

x

If you think that would help you to manage your budgeting better then why not? It can be hard to budget on a DMP. Some people use the envelope system, draw out their cash and put it into different envelopes for food, petrol etc. I have a bank account for all the direct debits etc. and use cash for everyday expenses. I have put in some little extras into my DMP and that money goes into my credit union account for a rainy day. It's not so easy to access the credit union money so it stops the temptation to buy stuff I want rather than need.

DVardysShadow

jim-jim wrote: »

Thanks for that.
Would you open 2 accounts ? 1 for bills and 1 for every day use.
Not that I would have anything to spend everyday.

x

Not in your situation I would not. Part of the discipline of a DMP is not to spend more than you have coming in - which means that you need to keep out of overdraft as basic financial management. So 2 bank accounts is 1 extra to keep in credit. Plus what do you do if a bill for £250 comes in and you have £220 in 1 account and £120 in another?