Opening a new bank account with same Bank I defaulted with?

dannyfleetwood

Hi.

I defaulted with Lloyds TSB 2 years ago and still currently owe them £1700 which I am paying through a DMP.

I need to open a new bank account but currently hold one with Santander and Natwest.

My question is, if I chose to go with TSB or Lloyds Bank now - would they rinse my account? I need to know for definate before opening it!

Thanks in advance

seanavfc92

dannyfleetwood wrote: »

Hi.

I defaulted with Lloyds TSB 2 years ago and still currently owe them £1700 which I am paying through a DMP.

I need to open a new bank account but currently hold one with Santander and Natwest.

My question is, if I chose to go with TSB or Lloyds Bank now - would they rinse my account? I need to know for definate before opening it!

Thanks in advance

You need to find out whether the debt went with Lloyds or TSB. You can check this on your credit file on Noddle or Experian.

With you being on a DMP, you only want a basic bank account, no overdraft or upgrades, so you'll only need two forms of I.D to be able to set the account up.

If the debt is with Lloyds, don't bank with them. The same applies for TSB. The reason for this is they have a right of offset which enables them to seize deposits from your current account and use it to pay off the money you owe.

You may be better of playing safe and going with someone like Barclays or Nationwide, any bank you have no debts associated with.

EDIT: Just thought I'd make you aware, if the debt is with Lloyds, you can bank with TSB and vice versa. They're trading as two seperate banks so there is no right of offset.

Monkeyballs

Hi,

Little puzzled why you would need another account if you already have accounts with Santander and Natwest? Could you not just open a second account with one of them if you need a new one?

Not really my business though

As suggested by Sean above, maybe worth giving Barclays or Nationwide a shot...

MB

FireWyrm

dannyfleetwood wrote: »

Hi.



My question is, if I chose to go with TSB or Lloyds Bank now - would they rinse my account?

If they dont refuse you outright, they will allow you to pay in sufficient money and then they will rinse it under the rules of 'offset'. Never have a financial link to a place you also have an obligation to. This also goes for things like mortgages. Never bank with your mortgage provider for exactly the same reason.

rising_from_the_ashes

FireWyrm wrote: »

Never have a financial link to a place you also have an obligation to. This also goes for things like mortgages. Never bank with your mortgage provider for exactly the same reason.

Absolutely agree

My mortgage provider (who I'm really happy with & I have a fab deal with) has recently been taken over by my bank

Total pain as it now means I'm probably going to have to try to move my mortgage which is a PITA

mum2one

you need to check which one took your account, - why not open a 2nd account with the others.
I have a natwest current account (opened online) and then opened a savings account (again online).

I'm in a DMP, - for me I have an account with barclays they are also a creditor, the only reason I kept it was CSA gets paid into it (thats when I get it - the whole £5 a week!) so once the £10 is in I withdraw it, been in a DMP for 15mths and have no issues with barclays, but I wouldn't trust them or anyone that I owe money to, to not to offset.

Also if you are intent on opening another account - check that the new bank is not under the branch of one of your creditors x

FireWyrm

rising_from_the_ashes wrote: »

Absolutely agree

My mortgage provider (who I'm really happy with & I have a fab deal with) has recently been taken over by my bank

Total pain as it now means I'm probably going to have to try to move my mortgage which is a PITA

Probably a silly question....but why dont you move your bank accounts instead? With the new switching rules, it ought to be a walk in the park and considerably less of a PITA than moving a mortgage (especially if you are happy with the deal).

dannyfleetwood

I was only asking out of curiousity.

I heard that for example, if you hold a debt with Halifax - they could take money from your Bank of Scotland account, should you have an account with them as they are the same banking group? Surely this means that even if Lloyds Bank have taken the debt, If I opened a TSB account, they could do the same?

seanavfc92

As I mentioned before, because they are trading as separate banks they cant use the right of Offset.