Barclays recalled my Student Overdraft :(

mattdt83

Hi all,

Been reading here for a while and succesfully claimed 2.3k off HSBC in Bank Charges recently. :money:

However im now in a bit of a pickle.

I've been in university up until 2 years ago, and had a student account with Barclays, which I ran up a £2500 overdraft on. As I left university, I havent paid or taken from this account since 2 years ago.

However, through lack of activity on the account and the interest on it taking me over my agreed O/D limit they have closed my account and passed the debt to Debt Managers Ltd. a recovery company in Edinburgh. They called me out of the blue, saying I owed them £2600 which was to be paid immediately.

This was a little shocking so I said I may be able to pay them £1000 of it from my recently recovered bank charges. But I wasn't sure. Now they're sending me letters threatening me with court action and debt collectors.

I really don't know where I stand - I work full time, but am in no position to pay this outstanding debt off in one go.

I am also just starting to claim any bank charges that may have been applied to this Barclays account. Can this help? I don't think the charges will be as much as my previous reclaim though.

I also have an money to pay off on my credit card. Only £200.

I really have no idea what to do now, bar trying to borrow money off someone to pay this off.

If anyone could give me some advice, I'd be very grateful.


Thanks and keep up the good work!

Matt.

mattdt83

PS. Is it possible to use the reclaim of bank charges against Barclays as a counter-claim?

mattdt83

Any help or advice would be greatly appreciated, I'm going to have to phone Debt Managers tonight. So if theres anything I can say to them, I would really be very thankful for, getting very very nervous about this situation. :'(

angelavdavis

1) Don't phone them, write to them (you may need proof of your correspondence if it does go to court). Always send recorded delivery and keep copies or your letters and their replies.
2) Complete a statement of affairs to show you are not capable of paying any more. SouthernScousers sticky post at the top of the DFW forum list will explain how to do this.
3) Check out the template below, enclosing the SOA and sending recorded delivery (so you can prove delivery). This will allow you to make a lower offer of monthly payments. Even if they refuse (which they will), continue making payments, they are less likely to progress the debt to court as the judge is likely to decide that you have made endeavours to clear the debt and will just rule that you continue making payments at the same level (if you have been honest about what you can afford).
4) Many lenders will allow you to settle for 70% full and final settlement. I personally would hold onto the £1k and put in a high interest account where you can't dip into it, claim back the charges from Barclays and then see if that totals 70%. There is a letter template on Nationaldebline's web site. Only settle if they have confirmed in writing that the payment is full and final settlement and the account is settled, otherwise they can come back for the remaining money at any time they choose.

___________________

Dear Sir/Madam

Re Account No/Reference No:− XXXXXXXXXX

With reference to the above account no, I can confirm I am not in a financial position to pay the outstanding amount in full as you have demanded.

I enclose a Personal Budget sheet which shows total income from all sources, and outgoings.

I am therefore writing to you to ask for you to accept this monthly payment to clear the debt.

In view of our circumstances, please would you agree to accept a reduced offer of £?? per month. If interest or other charges are being added to the account I would be grateful if you would freeze these so that all
payments made will reduce what I owe you.

Should circumstances improve I will contact you again.

We would be grateful if you would send a paying−in book to make it easier to pay you.

Thank you for your assistance. We look forward to hearing from you as soon as possible.

Yours faithfully

mattdt83

Thanks very much, I will send these letters off tomorrow. Fingers crossed.

DontDoDebtKids

Good luck!

mattdt83

Sorry, me again!

Another quick question, how do i get them to agree to a lower final amount that I owe them? You say I can get them down to 70% of my £2600 debt?

Also should I write in the letter a clause stating that I can pay off more than my monthly amount if I want. For instance, any christmas or birthday money I could use to pay this off? I've heard of people not being able to do this without penalties being placed on them!?


Thanks again!

fermi

You can read about how to make an offer of a "Full & Final Settlement" here:

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

There is also a template letter to write at the bottom of the link if you decide to give it a go.

Good luck.

mattdt83

So do you think it best to try this full and final settlement letter, before I tell them i can pay off in installments?

Sorry for all the questions, I just want to make sure I do this right.

poppy_f1

mattdt83 wrote: »

So do you think it best to try this full and final settlement letter, before I tell them i can pay off in installments?

Sorry for all the questions, I just want to make sure I do this right.

i'd try the f&f first then if they say no offer the installments

mattdt83

How much should I offer, I could offer them the 1K - but dya think they'll just bin me off straight away?

Wont they just come straight back and say, yea we'll take that and then make me pay the rest anyhow? Then I wont be able to have my 1k sitting in my ISA :'(