Working Tax credits and overdraft

pepper33

The Nationwide withdrew my overdraft facility, but I got backdated WTC of £1250, and it was paid into my nationwide a/c, and they have kept it, I can't withdraw it, and are using it to pay off the overdraft.
I have sent a letter of appropriation to them, but they are just ignoring it, meanwhile my WTC is being eaten up by the charges.
They also charged me on an account with only £71 a week going into it.
At my wits end the mortgage company want the shirt of my back, as I owe them arrears but am paying them back, but the WTC would certainly have paid at least three quarters of the arrears.

Don't know what to do?

pmlindyloo

pepper33 wrote: »

The Nationwide withdrew my overdraft facility, but I got backdated WTC of £1250, and it was paid into my nationwide a/c, and they have kept it, I can't withdraw it, and are using it to pay off the overdraft.
I have sent a letter of appropriation to them, but they are just ignoring it, meanwhile my WTC is being eaten up by the charges.
They also charged me on an account with only £71 a week going into it.
At my wits end the mortgage company want the shirt of my back, as I owe them arrears but am paying them back, but the WTC would certainly have paid at least three quarters of the arrears.

Don't know what to do?

Time to get some advice regarding your debts. Use the sticky on the Debtfree Wannabe board for free organisations who will help.

If you are at your 'wits end' then you need to get your affairs in order I suspect you are in panic mode at the moment.

As regards the bank taking the Tax credits payment to pay your debt there is some discussion as to whether banks can do this or not. Google if you want to find out more,

However, they have done it now so personally I would be opening a basic bank account with another bank unconnected with any creditors and have all of your income paid into this. Obviously you will have to notify everyone of your new bank account (DWP etc) Also transfer any DDs to your new basic account.

Then any interest/charges/overdraft debt from your present accounts can be treated as a non priority debt. When the bank realises that you are not using your account(s) they will write to you and you will be able to make some kind of repayment plan with them based on your income/expenditure/other debt. Hopefully they will then freeze any interest.

If you go through CAB or similar the bank is more likely to take any offer of repayment and freeze the interest. Also, CAB/similar will be able to support you with all your debts/income and expenditure.

pepper33

I had to change banks when I was off work ill, as Nationwide were taking my benefit and using it for charges, even though I wasn't using my bank account. So that is all done, but it is in the BCOBS that they can't take benefits, but they are taking no notice of anything.

pmlindyloo

pepper33 wrote: »

I had to change banks when I was off work ill, as Nationwide were taking my benefit and using it for charges, even though I wasn't using my bank account. So that is all done, but it is in the BCOBS that they can't take benefits, but they are taking no notice of anything.

I don't quite understand this. You changed banks because Nationwide were taking your benefit yet your WTC payment went into Nationwide? Why didn't it go into your new account? And your new account is a basic account with no overdraft facilities?

Sorry, totally muddled

As regards the first right of appropriation, my understanding is that you can use this to notify your bank beforehand that this money is to be used for rent/food etc but may not be used after the event.

See here:

http://moneyaware.co.uk/template-letters-court-forms/template-letters/

Also, the money wasn't earmarked for living expenses but for mortgage arrears which may not fall within this remit.

However, all may not be lost. CAB/you could write to the bank explaining the situation with an Income and Expenditure form on the lines that the bank charges are unfair (I believe that there is a template letter on this site to reclaim bank charges) and you might get some of these charges back.

But, in the end (without sounding too harsh I hope) the overdraft is a debt that you owe as well as your mortgage arrears.

Obviously your mortgage arrears are a priority debt and that is why I suggested that you got some professional help so the debts are prioritised.

pepper33

It went into that old a/c because HMRC did not check with me about my banking details, and I not received tax credits for two years. They did not notify of any details, and when it would be paid, and where into,otherwise as I did with all my other direct debits I changed them. The BCOBS does not allow the bank to take benefits, and years ago on my mother's a/c, when she died they swallowed up her savings to pay for something else. I sent a letter of appropriation after my mum died, and they closed the a/c and give us the money.

Billy_two_speakers

pepper33 wrote: »

It went into that old a/c because HMRC did not check with me about my banking details, and I not received tax credits for two years. They did not notify of any details, and when it would be paid, and where into,otherwise as I did with all my other direct debits I changed them. The BCOBS does not allow the bank to take benefits, and years ago on my mother's a/c, when she died they swallowed up her savings to pay for something else. I sent a letter of appropriation after my mum died, and they closed the a/c and give us the money.

Its not HMRC job to check your bank details its your job.

pepper33

I was not given any banking details by the HMRC, and they put the money in without any notice, so they did not even tell me they were giving me any money, until after they had put the money in. The bank took that money knowing it was a benefit to live on, and used it. Now that is my money, and I have told them I have every intention of paying the overdraft back, if they give me the money back to pay the arrears of my mortgage.

lld01

If you knew this amount was going to be paid at some point then it was your responsibility to make sure they had the new bank details on file.

If you did not know it was going to be paid then congratulations, you are better off than before as this has cleared one of your debts which ultimately still has to be paid.

Wicked_witch

Has the payment completely paid off the overdraft? if so I can understand your annoyance, but it is at least one less thing to worry about.

If not it is a problem, as if the bank continue to take charges it will all end up in their pocket and your debt will keep growing.

Not advice I know, just trying to clarify the situation a bit.

pepper33

No it hasn't cleared the overdraft, and I didn't expect to get tax credits, as if I had known I would have paid off my mortgage arrears. But will keep on trying, they are just ignoring me a the moment. It is disgraceful the way that they treat their customers, especially those who lose their jobs.

Wicked_witch

In that case, I can see why you want it sorted out.

Have you tried the Consumer Action Group site? They tend be be more focused on the problem rather than personal judgements although I think they have fewer active posters.