Lloyds Debt & PPI refund

bluemonday3

Hi

I will try to keep this short! I recently received a refund of PPI from Lloyds TSB. Was very surprised as I am in a DMP with Stepchange and owe them £1900 on a current account overdraft & £1200 on CC.
I spoke to their representative and they said I could settle the overdraft for the value of the refund, £1255. I was told they would close the account and the settlement offer sent by letter.
On receipt of the letter I was to ring up and pay over the phone.
The letter never came, so I banked the money and sat tight.
Fast forward a month and my car finally died and I felt no other choice but to use the money to buy another one. I need my car for work.
I received a text from Lloyds yesterday asking me to ring them as my payment was overdue.
Please can some one offer some advice... Do I inform them of what I had to do or do I sit tight to see what action they may take.
Lloyds have been my most difficult creditor and have been hassling me since the DMP started 3 years ago.
I am committed to repaying all debt and actually looked forward to getting them off my back but I felt I had no choice but to use the money for what I felt was an essential need.
The PPI was on a couple of old loans so I think that is why I received it though it was always my understanding that they would keep any refund towards my outstanding debt.
I would appreciate any advice please.

happy_bunny_2

They don't have to accept a full and final offer and you don't have to make one.

Surprised they didn't just put the PPI money towards one of the accounts.

Maybe ask Stepchange what they think?

bluemonday3

thanks for your reply, I agree thought they would never have sent me the actual money!!