Nat West letter saying accounts are to be closed??

bengal-stripe

helentay wrote: »

......there was a total of £188,439.98 paid into the account and £131,228.35 drawn out (which includes my sister in laws salary of £45,000). £57,000 was drawn out by him for his own usage, which left £211.63 to start the new year with.

That seems to me the problem.

We haven't been told about the nature of the business, nor the source of the incoming monies. There are huge amounts going through the account and the two owners are paying themselves princely salaries. Sole purpose of the business seems to fund a lavish lifestyle.

It might not be, but it looks distinctly dodgy!

grumbler

bengal-stripe wrote: »

...Sole purpose of the business seems to fund a lavish lifestyle....

Is this not the ultimate purpose of any business?
However, £131K salaries for £188K turnover do look dodgy.

dalesrider

helentay wrote: »

this could have been sorted out with a telephone call back last April or maybe earlier when it was clear to the bank that his limit needed to be increased to £600.

(which includes my sister in laws salary of £45,000). £57,000 was drawn out by him for his own usage, which left £211.63 to start the new year with.

Looking at that he did not need a larger overdraft......

He simply needed to pay S-in-L or himself less and there would have been no issue.

No wonder they withdrew the O/D when its pretty clear that they were taking out nearly as much as was being paid in.

So nearly 2K of that 6K a week is going out to 2 people.... How many other's do they pay, and what other overheads are there????

helentay_2

innovate wrote: »

I reckon herein lies some explanation as to why Natwest seem to have run out of patience. If you habitually go into unarranged overdrafts, you would expect the bank to close your account(s) because you have demonstrated that you are unable to manage your financial affairs. Why did your brother never go into the bank, or at least call them, to establish an overdraft limit suitable for his circumstances? Or better still, why did he not manage his affairs so he wouldn't repeatedly end up overdrawn (arranged or unarranged)?


The "wrong bits" I was referring to might be on the credit records. Since he hasn't seen his credit file, he doesn't know what is on there. I am amazed he would not check his credit files himself and instead believe what a 3rd party tell him. I'm afraid, this is yet another indication that your brother does not manage his financial affairs very well.

My brother is very good at running a successful business that generates nearly £100,000 of income for his wife and himself.
If he was to worry about being £40 over his limit he would drive himself into an early grave.

Yes I will accept that he should have been more proactive with the bank, but then the bank should have been as proactive themselves. It is a two way thing. It would be fully understandable if he ignored the bank but he never. I think his way of thinking was 'what is £40 for a day or so in the grand scheme of things'

I don't know anybody that 'checks their credit files'. I don't, my parents don't, my brother and his wfe don't and from what I know of my friends and other relations none of them do either.

Life is all about trust, is it not? You worry about things when you have to worry about them. To be that paranoid that you regularly serach the various credit reference agencies doesn't say much for working hard and spending your time more leisurely. As for the 3rd party, that is a bank, I am pretty sure that they could be trusted to tell the truth.

Anyhow, my brother has decided to go to the bank this morning and give them his business and private cheque books as well as all of the debit cards that go with them.
My sister in law isn't too happy though as she worries about the personal Direct Debits and how she will manage on a day to day basis until she can get another bank to open both personal and business accounts. In the meantime that will mean that his business is now 'frozen' and he intends to suspend all trading activities.

I really do hope that the bank are aware and accept where there attitude has taken my family.

I have suggested that they can open a 'no frills, basic account' with any bank so that at least the balances on the personal current and deposit accounts can be moved over.
Which from what I can see will leave the bank with just under £500 of debt remaining on the business account. He intends to offer the bank £1 a week to clear it!

Paul_01

helentay wrote: »

He intends to offer the bank £1 a week to clear it!

Not advisable.

If he does this, he will get a default issued against him and ultimately a CCJ. Not the best way to show his anger.

helentay_2

bengal-stripe wrote: »

That seems to me the problem.

We haven't been told about the nature of the business, nor the source of the incoming monies. There are huge amounts going through the account and the two owners are paying themselves princely salaries. Sole purpose of the business seems to fund a lavish lifestyle.

It might not be, but it looks distinctly dodgy!

Why do you say that? The nature or the sources of the monies is not relevant. It is a genuine and honest business that they both run successfully. As for the 'princely' salaries, that money represents the time they both put into the business as well as the risks that they endure (customers failing to pay because they have financial problems).

Of course the sole purpose is to provide a good lifestyle for them, what other purpose could there be?

Good grief when my brother worked in the City of London before he started the business his salary alone in the early 90's was in excess of £100,000 a year! With that came the stress of the job, the long hours as well as the daily 2 hour each way commute.

helentay_2

dalesrider wrote: »

Looking at that he did not need a larger overdraft......

He simply needed to pay S-in-L or himself less and there would have been no issue.

No wonder they withdrew the O/D when its pretty clear that they were taking out nearly as much as was being paid in.

So nearly 2K of that 6K a week is going out to 2 people.... How many other's do they pay, and what other overheads are there????

I'm not here to explain how or why my brother makes money. At the end of the day it costs him, excluding his wife's wages, approx £86,000 to generate sales of £188,000. What is he supposed to do with the rest? Burn it?

The idea of an overdraft is to smooth out the timings of when expenses are paid out and when the income is received. Most businesses have their stock tied up with an overdtaft. My brother holds no stock, he simply gets paid for advice given. The vast majority of the overheads relate to payments for two motor cars, lease of office space, wages for a secretary and one other member of staff plus the general running overheads.

helentay_2

Paul_01 wrote: »

Not advisable.

If he does this, he will get a default issued against him and ultimately a CCJ. Not the best way to show his anger.

I don't think that you have read the whole of my thread. A default has already been issued - 2 days ago! It was served on him yesterday. From what he knows and what he has been told by the bank, there is little more damage that the bank can do to his credit rating that hasn't already been done. So, using his words - in for a penny, in for a pound!

And the alternative way is?

I'll say one thing for my brother and that is that he will allow no one to get the better of him. Threats and intimidation mean nothing to him. However when the bank wrote to his wife telling her:

"Dear Mrs *****
Unfortunately due to a breakdown in communication with the other party to the above accounts we have to withdraw banking facilities forthwith.You may withdraw funds from these accounts but unfortunately any attempt to make deposits will be refused. Alternatively you may wish to remove the other party from these accounts. If you wish to explore this option, please contact your local branch.

Please be aware that at the expiry of 30 days from today's date, any credit balances still held in these accounts will be siezed and used under the right of set off".

he wasn't best pleased!

dalesrider

helentay wrote: »

I'm not here to explain how or why my brother makes money. At the end of the day it costs him, excluding his wife's wages, approx £86,000 to generate sales of £188,000. What is he supposed to do with the rest? Burn it?

The idea of an overdraft is to smooth out the timings of when expenses are paid out and when the income is received. Most businesses have their stock tied up with an overdtaft. My brother holds no stock, he simply gets paid for advice given. The vast majority of the overheads relate to payments for two motor cars, lease of office space, wages for a secretary and one other member of staff plus the general running overheads.

You miss the point.

Had he paid either himself or his Mrs 1K less over the year there would have been no issue. What would 1K out of 90K mean?

They are simply taking out more than the company can sustain.

That is basic budgeting. Not rocket sicence. Also a sure fire way to bankruptcy.

As is his attitude to the bank and what has happened. He has just put at risk 2 peoples jobs and also their income. All because he did not like the way he was spoken too....

I think you need to have a hard word with him, or he will really could end up losing everything.

Or he needs to take a step back and think.....

How would he ADVISE someone else in that situation.

£590 against £188,000.00....

That is one hell of a loss for nothing.

pmduk

helentay wrote: »

"Dear Mrs *****
Unfortunately due to a breakdown in communication with the other party to the above accounts we have to withdraw banking facilities forthwith.You may withdraw funds from these accounts but unfortunately any attempt to make deposits will be refused. Alternatively you may wish to remove the other party from these accounts. If you wish to explore this option, please contact your local branch.

This is quite telling. The blame is being laid quite clearly at your brother's feet here. I wonder if his attitude and temperament were perhaps "over the top" whilst talking to them?