Barclays account and overdraft terminated - what are my options?

barclayscustomer_2

Hi,

I've had a Barclays account for more than a decade. When I was at uni, I applied for a student overdraft. By the time I finished my course, the limit for this was £2000.

Back in 2008 (I think), Barclays attached on of their Personal Reserves to my account, for £150. At the time, I stupidly and naively saw this as an extension to my overdraft - rather than the extortionate moneymaking scheme for the bank that it actually is.

I was in a low paid job and dipped into the reserve. Without going into too much detail, I basically ended up in a vicious cycle of paying charges and being stuck in the Reserve, thus incurring further charges and so on.

At one point, I was made unemployed. A relative generously supported me whilst I was out of work, however, being unable to pay even the charges, I soon had extra debt on top of the Personal Reserve.

In the end, this relative paid it off, saying it was better to pay them back than give the money to the bank! This could have happened sooner, but I was embarrassed about my finances and hadn't mentioned anything until they found out somehow.

Anyway, once I was back in employment, I was often towards the wrong end of my overdraft, but at least I largely avoided the Personal Reserve - stupidly there were a few occasions where I used it, but thankfully I was able to afford it more easily, so it wasn't the big deal that it once was.

Last year, I left this job and moved abroad. I was doing some freelancing over the internet, but wasn't earning a huge amount. This wasn't so bad, because the cost of living is quite low, but I ended up getting back in this cycle again, and ended up paying quite a bit again in charges.

However, towards the end of the year, for various reasons, the work dried up a fair bit. Thankfully, I had some cash, plus my partner has been supportive too, but the charges outweighed my income, and I am in a similar position of having not only exceeded my overdraft limit, but the Personal Reserve as well.

Anyway, I had a letter sent to my old address which is dated for a week ago. It is from Barclays and details how much I owe and says I didn't get in touch and that they are now terminating my account and are requesting that I cut up my debit card and send it back, along with any cheque books. Furthermore, they are demanding that I pay the overdraft and extra money back.

The thing is, in the past few weeks, the freelancing work that I was doing has finally, after all this time, presented a great opportunity. Without going into the boring details, since the opportunity presented itself, I having just been getting things set up, and within the past couple of days things have got sorted and I should, from now on, be earning a decent amount of money.

So, after struggling for quite a while, I finally had this good news, only to hear about Barclays decision to terminate my account and demand the money back.

I haven't spoken to Barclays yet, although I will obviously do so as a matter of urgency. Has anyone had any similar experiences though? i.e. Barclays terminating accounts and demanding back the overdraft.

Is there any chance that they will accept a payment plan and allow me to keep the account open? If so, what will happen with the account? Will it be the case that I can't withdraw cash until the overdraft is cleared - i.e. would I need a positive balance before I can withdraw money again? Would I be able to retain an overdraft facility once everything is paid off (not that I would necessarily want one if it is finally paid off after all these years!)

Having got the opportunity with the work that I am doing, I was planning to finally pay my overdraft off anyway and estimate that I could afford to have it cleared within 10 weeks - possibly even less.

As I mentioned earlier, I had gone severely over the limit before, and nothing was said then, and eventually it was brought back within the limits of my regular overdraft.

If the account has to be closed after all this, I am not so bothered, particularly considering how much Barclays have cost me over the years. I am just concerned that when I speak with them, they will not allow me to pay it off with a plan and will demand the money back all at once. Like I say, I expect that I can pay it off within a couple of months or so, but there is zero chance of me paying one large lump sum straight away - I simply don't have the money!

Finally, is there any possibility of trying to reclaim any of the charges back. I have looked online about this, but it is quite confusing. Since the reserve fee was put on my account, I must have been charged somewhere between £2000-£5000 (I know this is a wide range, I would need to sit down and work out a more accurate figure actually would be).

Thanks for any help and advice !!

Herbalus

I would open a new account with another bank as soon as possible. It's quite likely (your letter should tell you) that access to your account with Barclays will be stopped almost immediately.

As far as talking to Barclays is concerned, I doubt you'll get them to overturn their decision from what you've said. Obviously, you'll have to inform them that you can't pay them back immediately, and you can offer a repayment plan, but whether they accept that is another matter.

CKhalvashi

Herbalus has, unfortunately, hit the nail on the head.

I've had a quick look at one of the bank guides, and if they feel that there is a default there (which is more reason to get yourself with another bank, and get any Ltd company set up before the default goes through), then they are welcome to close the account.

Move banking, then speak to Barclays about repayment. Natwest/RBS offer(ed) an account, that if you haven't any debt with them, you can run a business through that, called the 'step' account.

CK