How can I help my son with bank overdraft charges please?

Becky1775

Hi, I'm looking for some advice as to how I can help my son tackle ever growing overdraft and associated charges.

Basically he had got into debt due to various jobs not paying correct wages, or on time, and the problem had snowballed, leaving him with an overdraft of £1000 and a credit card bill of £800.
He found a new, better paid job in November (he is a chef) spoke to his bank, got all further charges frozen, agreed a payment plan and all seemed good.
However, his new employers are just as bad as previous ones - they pay sporadically - five or six weeks apart (should be monthly salary) and not into his bank account, but cash (he doesn't get a payslip either, but that's a whole other issue!!)
He lives in a very rural town, doesn't drive (never had the cash to continue lessons) there are trains to the nearest town, but at odd hours, and it's a 6 hour round trip - and his bank has closed the branch in his town. He also works average 90 hour week, and is often required to use his supposed Monday off to help out at other hotels owned by the small company he works for.

So, I did manage to pick him up today, he took his agreed £500 to the bank to pay off February's agreed amount. And although he has managed to make payments in January and February (he worked every single day in December) the overdraft now stands at £2000. Luckily he had holiday pay from his previous job which cleared his credit card in November.

He has managed to speak to his bank every couple of weeks, but they are unwilling to halt any further charges. He's not using his account, but does have a mobile phone bill direct debit coming from it, and is paying off an electricity bill from a previous house too - so the charges are coming from the direct debits bouncing, as the agreement was he'd not use the bank account - and any money he's paying in is getting eaten up with these, the balance is not reducing, but instead going up every month.

Is there any debt advice agency that would work with him, as a third party or something, to help him move forwards out of this awful situation?

My suggestion to him was to open a basic card account (no overdraft facility etc) with a bank that does still have a branch in his town, pay his wages in there, and set up new direct debits, and then pay off the £500 or so each month from the one he has now. However, due to the bank saying he broke his prior agreement, they won't stop charging him on the unauthorised overdraft he has...so it's that aspect I really need advice with please.

Thanks very much for reading, please ask me any questions to clarify if I've missed anything, and I hope someone can give some guidance.

Thanks :-)

NectarCollector

if you can afford it, and are a (very) nice parent, offer to clear his overdraft yourself, and write up and sign a contract between the 2 of you (I watch a lot of Judge Rinder) stating that you expect him to pay you back within a year or some other reasonable period of time, this will stop him incurring overdrawn fees and his wages should then be able to pay for things like bills and other Direct Debits and a little bit each month to pay you back.

Might be useful if you include how much the overdrawn fee is each month and how much he is expected to pay back for bills.

mgdavid

Becky1775 wrote: »

......... And although he has managed to make payments in January and February (he worked every single day in December) the overdraft now stands at £2000. ........

are you able to give sufficient detail to explain how an o/d of £1000 became £2000 in 3 months despite him making payments in 2 of those months?
Do you have sight of his statements so you can understand where his money is going?

grumbler

If the DDs get bounced, why not cancel them to stop some charges?
Why is he paying for some 'previous' house?

It's worth posting his SOA on the Debt-Free Wannabe board as his main problem seems to be outgoings bigger than the income, not the bank charges.

Getting a basic account without charges is a good idea, e.g. the new Nationwide's FlexBasic.

Re agencies that offer help see Debt Problems -What to do & where to get help

Becky1775

Hi and thankyou very much for the replies - they were along the lines we were thinking of.

He previously rented a house with his ex girlfriend, who had severe epilepsy (could not work) and whose parents set up all bills in their names, but with his bank account - so they could 'keep track' of things....this was unfortunately during a period my son was caught up in the new relationship and we had little contact. By the time we re-established our relationship, the girlfriend had moved on, another chef friend had moved in, and was leaving the night storage heaters and electric oil radiators on for days on end, while my son was at work...hence my son was left with a shocking electricity bill, which he is still paying off, and because the bills weren't in his name, it was a nightmare to try and resolve.

Tomorrow we will pop to the bank, get the last 3 months bank statements so I can go through with him...speak to the bank and calculate what needs to be paid to close the account, pay off the debt etc.

Next step, get him to set up a basic bank account - I don't know if Barclays do these? It would help if he needs any help going forwards, as there is a branch in his town, and we bank with them too.

Thanks very much for helping to clarify our thoughts!

:-)

grumbler

Your son seems to need a serious help if in his situation he has neither paper statements nor online ones.

http://www.barclays.co.uk/basic-current-account

xylophone

Surely he needs to sort out why he receives no payslips and why his company does not pay him on time?

What about his tax and National Insurance?

http://www.acas.org.uk/index.aspx?articleid=1366

Does he have a contract of employment?

Becky1775

Yes, obviously, but the increasing debt is the bigger issue at the moment.

He's been offered a 7 Year contract which ties him into the business in all kinds of ways...

colsten

Becky1775 wrote: »

He's been offered a 7 Year contract which ties him into the business in all kinds of ways...

All the more reason why he should be paid at agreed, regular dates, and that his NI & pension contribution is being taken care of. May be seek assistance from your local CAB.

Becky1775

Hi Colsten,
Our local CAB is no more.
Our main concern is to sort out his finances at the moment, but he's not signed the contract due to other concerns about his employment etc, but thankyou

[Deleted User]

Becky1775 wrote: »

Hi and thankyou very much for the replies - they were along the lines we were thinking of.

He previously rented a house with his ex girlfriend, who had severe epilepsy (could not work) and whose parents set up all bills in their names, but with his bank account - so they could 'keep track' of things....this was unfortunately during a period my son was caught up in the new relationship and we had little contact. By the time we re-established our relationship, the girlfriend had moved on, another chef friend had moved in, and was leaving the night storage heaters and electric oil radiators on for days on end, while my son was at work...hence my son was left with a shocking electricity bill, which he is still paying off, and because the bills weren't in his name, it was a nightmare to try and resolve.

Tomorrow we will pop to the bank, get the last 3 months bank statements so I can go through with him...speak to the bank and calculate what needs to be paid to close the account, pay off the debt etc.

Next step, get him to set up a basic bank account - I don't know if Barclays do these? It would help if he needs any help going forwards, as there is a branch in his town, and we bank with them too.

Thanks very much for helping to clarify our thoughts!

:-)

Are the bills in his name or not.


If they are in someone else's name but the direct debit is set up on his account then surely he can just cancel and not owe anything?