Overdraft and defaulting

button_j

Hi All

Looking for some advice on behalf of a friend who has recently been widowed.

The couple had a joint account up until the husbands unfortunate passing. The husband was always responsible for the finances as the wife has never worked. The account has an overdraft of £3k on it. She has recently been given a cheque for £15k from life insurance.

Is it possible to put this 15k into another account with a different bank and default on the overdraft? What kind of come back can the bank have?

MTIA

Jim

dalesrider

If it was a joint account then the money has to be paid back. If it was a sole then it could possibly be avoided. But the bank would require proof that their were no funds in the estate to pay it back.

End of the day on a joint account. Both parties have had the benefit of the money.

button_j

dalesrider wrote: »

If it was a joint account then the money has to be paid back. If it was a sole then it could possibly be avoided. But the bank would require proof that their were no funds in the estate to pay it back.

End of the day on a joint account. Both parties have had the benefit of the money.

Thanks for the reply.

There is the cash from the insurance and £100k worth of equity in a house. To what lengths can the bank go to? What steps can they take to retrieve the money?

MrSilk

Maybe a CCJ, Is this the only debt you have?, is the whole £3k being used?

However, are they still adding interest/charges on the overdraft?

meer53

Why would she want to default on the overdraft if she now has money to pay it back ? Joint account - joint liability for any debt, it will have to be paid back at some stage.

MrSilk

meer53 wrote: »

Why would she want to default on the overdraft if she now has money to pay it back ? Joint account - joint liability for any debt, it will have to be paid back at some stage.

wanting to keep the £15k rather than pay back what they owe. My advise, just pay it back. After all, you legitimately spent it.

button_j

MrSilk wrote: »

wanting to keep the £15k rather than pay back what they owe. My advise, just pay it back. After all, you legitimately spent it.

Its difficult to explain but the overdraft was increased only prior to her being widowed and it wasn't of her doing. She's 70 and has no other source of income now apart from benefits. I'm just exploring the options open to her. If the bank went down the CCJ route then we're talking bailiffs?

button_j

MrSilk wrote: »

Maybe a CCJ, Is this the only debt you have?, is the whole £3k being used?

However, are they still adding interest/charges on the overdraft?

Yes, this is the only debt. Not sure what you mean by is it being used?

Interest and charges are still going on to the overdraft, yes.

meer53

button_j wrote: »

Its difficult to explain but the overdraft was increased only prior to her being widowed and it wasn't of her doing. She's 70 and has no other source of income now apart from benefits. I'm just exploring the options open to her. If the bank went down the CCJ route then we're talking bailiffs?

But it is a joint account and she is jointly liable for repayment of the debt. She might not have any income but she does have 15k worth of funds she can now use to repay it. Why would she not want to repay it ? At 70, and after losing her husband does she really need any more hassle ?

Just pay it back and move on. Defaulting shouldn't be classed as an "option" unless it can't be avoided.

dalesrider

button_j wrote: »

Thanks for the reply.

There is the cash from the insurance and £100k worth of equity in a house. To what lengths can the bank go to? What steps can they take to retrieve the money?

I take it that now the account is being converted to a sole account?

I would guess that after requesting all the info on the estate they would claim the money back via the courts and as such would block any payout by the estate untill they get the balance back.

Given that she will now get a full state pension and possibly further state benefits.

TBH. While I understand 3K is a lot of money in her situation. The paying it back will be by far the best option. As the last thing she will need now is further stress of any ongoing procedings.
You would also have to be very carefull over where the money is placed. As it could very easily be frozen till it was all sorted and leave her in a situation where she had very limited access to funds.

meer53

Another thought. When the bank contact her to discuss repayment of the overdraft, they will probably go through her income and expenditure to agree the best way to repay them. This will include asking about any savings or investments she may have, is she (or are you) planning on not disclosing the 15k ?

Unless you have POA or a third party mandate they won't speak to you anyway.