overdraft and current account closed with immediate effect

Sanha1234

looking for general advice.

Due to Barclays upping the charge on my overdraft and it consequently being unmanageable as we were only breaking even (interest was £30 now charges equate to £93) I decided to write to Barclays asking if they would consider freezing the interest and allow me to pay £50 per month to clear the overdraft, my only debt apart from a couple of hundred on my credit card. We have car on hp and wife has a professional study loan as well which we are repaying with no arrears, the overdraft is a hangover from studying fees.

Then a week later I attempted to pay for petrol to get home from work and my card for Barclays was declined, luckily had £20 in my pocket to pay. Returned home to find nice demand letter, undated, on my doormat. The branch informed me the card had been cancelled 3 days prior to receipt of the letter. Barclays have terminated current account agreement and demand £2900 immediately. I can no longer take money from the account and all direct debits cancelled. However, they did not return to my employer the two weeks wages paid into the account on Friday.

They are threatening to pass the debt on to a debt collection agency!!!

My instinct is to write again offering to pay at £50 per month if not acceptable to the bank then simply tell them to take me to court with immediate effect. Don't really want to go down debt management plan route as we honouring all our loans and hp and was managing to pay interest on the overdraft before Barclays trebled that charge.

Some have suggested all the power lies with the bank, but surely offering to pay in instalments must have some bearing? Can it be reasonable to offer to pay the debt over time and for them to refuse? Why call in debt agency when I have offered to repay? What can the debt collection agency do without a court order?

Thrugelmir

Convert the overdraft to a loan. This will formalise the arrangement.

Barclays view is why should they take a hit when all your other creditors are being repaid in full.

Take a long hard look at your budget and see what can be cut out.

seanavfc92

If you have wages paid in to that account whilst it's still frozen, you can use the First Right of Appropriation to ensure the money is used for basic living costs.

Link to template letter (courtesy of Moneyaware website):

http://moneyawarecouk.c.presscdn.com/wp-content/uploads/StepChange-Debt-Charity-First-right-of-appropriation1.pdf

sourcrates

They wont take you to court OP, they will simply pass the debt to a DCA.
You could try offering them the £50, but I suspect they will just cut there losses and use the DCA.
You are by no means the only one affected by Barclays new overdraught rules, many people have come on this forum asking for advice recently.
If it does go to a DCA they will be more flexible than the bank was, and will most likely, after some huffing and puffing, accept the £50.

eyeopener2

Sourcrates is right, just let things take there course of Barclays passing to there in house dca (is it still mercers?) And see what you can negotiate.

I always find it amusing that banks threaten Debt collectors to people in trouble, when those of us with experience know they are about as threatening as a sleepy Koala.

Anyway.......

This could be a blessing in disguise as you can start afresh, have a new current account without an overdraft and live within your means. It looks like you're getting sorted anyway so this is just another hurdle to overcome.

Nobody needs an overdraft if you budget correctly and have an emergency fund. Whatever the banks may say.

Sanha1234

Thanks all for advice. I will have a root on the forum re overdraft.

Sazzie23

I'd make sure your wages and any other income go elsewhere asap.

DCA are generally reasonable if they can see your I&E is stable and you are willing to pay.

Good luck

eyeopener2

Just tell them your paying £50 or whatever you can afford. Don't get into negotiations or sending income and expenditure forms.