Freezing Overdraft Interest?

lizperrott

I have been advised by the CAB to transfer my pension in come into a different account because I can not afford to pay all the bank charges being made on my account. The reason for this is that when i was working I had a £3000 over draft limit for a small monthly payment. I have never managed to clear that over draft since I retired and now TSB have upped the charges and it is no longer a small monthly payment. It is like living on a credit card.

CAB suggest I use a second bank account which I rarely use and have my pension paid into this. Then write to TSB and suggest a repayment of the overdraft that I can afford. Is this legal and are TSB likely to agree to freezing the interest on the overdraft so I can pay it off. At the moment it is just getting higher not lower due to bank charges and I see no way of paying it off as things stand.

dunstonh

Is this legal and are TSB likely to agree to freezing the interest on the overdraft so I can pay it off.

You can pay your income where you like. However, TSB are unlikely to freeze interest unless you are in financial hardship. Freezing of interest is one of the options but not only one. It also carries a risk that TSB may be less helpful if they dont have an income coming in. They could decide that the risk of default has now become more likely with no income in the account and pass it for debt collection.

i would suggest a discussion with an account manager with TSB and if you are in financial hardship, make a case to them to see it your way.

-taff

I would also suggest phoning the national debtline for some advice.

yasmup

lizperrott wrote: »

I have been advised by the CAB to transfer my pension in come into a different account because I can not afford to pay all the bank charges being made on my account. The reason for this is that when i was working I had a £3000 over draft limit for a small monthly payment. I have never managed to clear that over draft since I retired and now TSB have upped the charges and it is no longer a small monthly payment. It is like living on a credit card.

CAB suggest I use a second bank account which I rarely use and have my pension paid into this. Then write to TSB and suggest a repayment of the overdraft that I can afford. Is this legal and are TSB likely to agree to freezing the interest on the overdraft so I can pay it off. At the moment it is just getting higher not lower due to bank charges and I see no way of paying it off as things stand.

I'm sure if that is what the CAB have advised it is legal.

However, if you are in doubtr, best to seek independent legal advice ... and an open intenet forum is not the appropriate place to obtain that ... not if you later may need to rely upon it.

As regards your debts, go back to the CAB if you are still worried about servicing them.

Or if you don't trust the CAB any more, try another debt charity such as Stepchange formally known as the Consumer Credit Counselling Service (CCCS)

-taff

It is completely legal to open another account and deposit your income in it.
By doing that you're avoiding the set off rules, where they can shut down your overdraft straightaway and keep any income coming in to service your debt whether you need that income or not.

National_Debtline

Hello there,

As -taff has mentioned, it is perfectly legal to move banks. We call this opening a 'safe' bank account. It will protect your pension income. You should then look to negotiate affordable payments with the old bank to pay off the old overdraft.

Our website has a useful guide to dealing with debts which you can find here.

Alternatively, we have an online debt advice tool, called My Money Steps.

Best wishes,

David @natdebtline