Lloyds closed my bank account before paying the debt off

christy_

So I switched my graduate account to Santander from Lloyds. It has possibly been the most painful thing I've done.

I had originally a £1750 overdraft with lloyds, which I used every penny of. Santander have only given me a £1000 overdraft. Lloyds have now closed my account, without given me a chance to try sort things out with Santander. I phoned Lloyds (on the 4th) to see what was going on and they said the account looks like it settled. Now I have only just received a letter from Lloyds (dated for the 3rd) that I have 30 days to pay off this debt. It's the 15th now, only just got this through the post. Now I have had 2 bank meetings with Santander to get this overdraft extended so I can pay this debt off with the overdraft and they say they will contact me and never do. So now I can only pay off £1000 and have no idea where I'm going to get £750 from.

Can they do this? I thought they had to wait until I pay off the amount I owe them.

chambta

Can Lloyds re-open the account?

I know some banks can do so within a certain timescale. I can't see how they could have closed it without getting the funds to zero it though.

If Santander only offered £1000 I cannot see them extending it immediately as it doesn't seem to me that they've done anything wrong here.

Your best approach is to ring Lloyds and get someone to sort it, even if it means complaining.

grumbler

christy_ wrote: »

Can they do this? I thought they had to wait until I pay off the amount I owe them.

Why would they wait and for how long? All overdrafts are repayable on demand, and you switched your account to another bank.

Can I switch if I'm overdrawn?
Yes. What you'll need to do with your old overdraft will depend on whether your new bank or building society can provide facilities to help you pay off any overdraft, which will be subject to the new bank's normal lending criteria.
If your new bank can't help with your overdraft, you must make separate arrangements to repay your old bank or building society what you owe.
But there are no exact rules in place about switching when you're overdrawn, what happens will vary by provider.

>> 7-day bank switching era begins: Full Q&A on - Money Saving Expert

Mr_Goodkat

Moving banks when you have a large overdraft is a risky business and only worth going through with the switch if the new bank have offered you a overdraft equal to or larger than your current outstanding one.


Why did you opt to go through the switching service, was it some cash back incentive or other?


All overdrafts are repayable on demand, Banks will normally give students and graduates quite a lot of slack when it comes to overdrafts as long as you remain within the limits and there are regular deposits going into the account. They are happy to give interest free overdrafts to students that usually continue for a year or two as graduate accounts in the hope that you will become a profitable customer in the future and take out additional products with them. As you are closing your account with them they rightly want repaying.


I would arrange to go in and see Lloyds and see if they are willing to reactivate the account if you cancel moving to Santander as it seems highly unlikely that Santander will extend your overdraft.


If Lloyds won't then you need to find another way of repaying the money:
1) See if another bank will let you open an account with a overdraft of £1000 or more to cover the difference
2) See if you are eligible for a credit card that allows super balance transfers


If none of the above is possible see if Lloyds will convert the outstanding OD to a load so that you can pay it off over an agreed period of time,


If none of the above is successful Lloyds will pursue you for the outstanding balance and if you genuinely can't pay they will come to a payment arrangement with you but this will trash your credit file for six years.


This could turn out to be a very expensive lesson but good luck!

jonesMUFCforever

Lloyds or any other bank cannot close an account if it is overdrawn.


So either the whole overdrawn amount must have been sent to Santander or the Lloyds account must still be open. It might show as transferring out on their system.
Might be the only option you have is to do a reverse transfer back from Santander to LLoyds IF they give you the old overdraft back.

Lloyds_Bank

christy_ wrote: »

So I switched my graduate account to Santander from Lloyds. It has possibly been the most painful thing I've done.

I had originally a £1750 overdraft with lloyds, which I used every penny of. Santander have only given me a £1000 overdraft. Lloyds have now closed my account, without given me a chance to try sort things out with Santander. I phoned Lloyds (on the 4th) to see what was going on and they said the account looks like it settled. Now I have only just received a letter from Lloyds (dated for the 3rd) that I have 30 days to pay off this debt. It's the 15th now, only just got this through the post. Now I have had 2 bank meetings with Santander to get this overdraft extended so I can pay this debt off with the overdraft and they say they will contact me and never do. So now I can only pay off £1000 and have no idea where I'm going to get £750 from.

Can they do this? I thought they had to wait until I pay off the amount I owe them.

Hi christy_,

When you arrange to switch your account to another provider, part of this process involves the closure of your existing account. Due to the outstanding overdraft on your Lloyds account, this wouldn't have been possible. As such, the account would be passed to our Collections team, who'd contact you in regard to the amount outstanding.

If you haven't already done so, I'd advise contacting our Collections team on the number provided on the letter (alternatively, you can reach them on 0808 145 0368). They'll be able to discuss what options are available in regard to the repayment of the overdraft.

I hope this helps, but if you have any other questions, let me know & I'll do my best to assist.

Thanks,

Graeme