Questions about loan and bank account

theHobgoblin

Hi guys.

New to the forum so go easy! Apologies if this wasn't the right place to post this but was hoping for some advice. I do have a meeting set up with my bank and CAB next week but am worried and have a few questions.

Bit of background. I was recently dismissed from work on grounds of ill health. I am 33 and had been with the company for nine years. I receieved no pay off except for three weeks notice pay. So I was on 25 K and now down to nothing. I have lived month to month and have no signficant savings. I live in rented acccomadation and own no property and am single and chidless.
I have one outstanding loan to Natwest of 12K. My monthly loan repayments are 350 pounds a month. I have an overdraft of 2K. Monthly interest charges are around 20 pounds. No credit cards or store cards. Only other signficant outgoing is my mobile phone contract of 35 pounds per month. My appeal against my dismissal failed two weeks ago so I have paid my rent until the end of the month.

My questions are what my options are moving forward. What are the bank likely to want or require from me? What is their claim on any money loaned or given to me by family or friends in the interim? Am I able to open a basic bank account with another bank so I have somewhere to store money where Natwest can't touch it? The interest charges alone on my Gold account with them would for instance slash over a third of any JSA I recieve. I have small amount of savings in a family account that can pay my rent for a few months. I am not planning on being out of work for very long but am worried about really everything falling apart so quickly. Certainly a lesson learnt about preparing for such rainy days in future!.

Any help and advice appreciated.

Pixie5740

In your circumstances I would open a new current account with a bank not connected with NatWest and start having your benefits and any money from family paid in there. Where is your savings account? If that's with NatWest, withdraw the money and put that in another bank too.

Then contact NatWest and explain that you're facing financial hardship. NatWest could freeze the interest and agree to set up a debt management plan with you. This will negatively impact your credit file but your health and getting back on your feet is more important. Credit files can always be repaired with time.

It might also be worth contacting one of the debt charities such as CAP or Step Change.

Tixy

Definitely get a new bank account set up for benefits to go in to.
You should have no issues getting a basic bank account with a different bank.

To start with you will likely only be able to afford to offer token payments to the debts - e.g. £1 to each debt per month.
You can find template letters on national debtline or CAB that you can use, or you could speak to one of the debt advice charities and they can help advise and assist.
This is a list of debt advice charities - IMPORTANT - Where to seek professional impartial advice about your debts.

Also have a look in to whether you can claim housing benefit whilst you are out of work.

Candyapple

First off you need to stop that paying that £15 monthly fee for the Gold account with Natwest.

Secondly, assuming your credit history is otherwise in tact at this point in time, open a new bank account elsewhere and then I would try and apply for a 0% money transfer card such as the MBNA for 24 months and use that money to clear your overdraft. At least that way you won't have to worry about incurring interest charges or overlimit fees on your overdraft etc.

As for your loan, if you are actively looking for work and feel as though you will find another job relatively quickly then use some of the funds available to you to keep up the repayments to keep your credit history in tact.

If you are not positive you are likely to return to work anytime soon, then contact Natwest and come to an agreement to reduced payment plan. If you can avoid this it would be better as an arrangement to pay markers stay on your credit file longer than defaults and can wreck your credit rating for a very long time.

Tixy

They won't get a new credit card from the likes of MBNA without an income/employment though.