DRO bank question personal / joint accounts

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I have a personal bank account with an overdraft of £6000. I also have £8000 of credit card debt in my name only.

My husband and I have a joint bank account at the same bank as my personal account. If I apply for a DRO, I am assuming they will close my personal account. I have opened a basic account in preparation at a different bank.

Will they also close the joint account or try to take any of my husband's meagre earnings?

Thank you for any advice!

fermi

It's up to the bank, but some may close it or want their name taken off. May be advisable to try to separate them now before, to minimise impact of any financial association from it, if that is the only joint financial account you have.

Not sure what you mean about take his earnings?

The OR? Or the bank that may be owed?

A bank can only 'set off' against a debt from a current account if it is held in the 'same capacity', which a joint account is not. However, banks often do what they should not, so it would be wise again to separate accounts beforehand. That way there is not possibility, rather than taking the chance and having to make perhaps lengthy complaints to get back funds if they are wrongly appropriated.

National_Debtline

Hi,

I agree that it's worth taking your name off your joint bank account before you start a DRO to avoid a financial association. The banks shouldn't take money from a joint account to service a debt in someone's sole name but it's best to avoid that possibility ever happening, as fermi says.

James
@natdebtline

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Thank you so much, I appreciate the help! I will have my name removed from the joint account.

About the joint account and my husband's earnings - I meant his wages. He has a 16 - 24hr a week minimum wage job, it brings in just under £150 a week. We get tax credits as well. We need it to live on, would the bank try and take any of it? We are already about £1000 into our joint account overdraft. If my name is no longer on the account, would they be able to take anything from it?

National_Debtline

As the joint account has an overdraft debt there is a joint and several liability. That means that either you or your husband can be asked to repay the whole debt potentially, not just half each. If you complete a DRO your liability will end but your husband will still owe the overdraft debt.

As long as you husband can still service the account based on the terms and conditions it might not be an issue, usually overdraft accounts need a certain amount of money paid in each month. Ultimately it's up to the bank whether they want to close it and ask for the overdraft debt to be repaid though.

James
@natdebtline

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Thank you for the help.

I have another question about disposing of assets. I had one asset worth around £1000 that I have just sold so I could pay the rent and buy food, electric and gas. Do I need to tell them about this?

National_Debtline

You may be asked about where the money came from etc, so you should mention it then. As long as the item was sold for a fair market value and you used it for essential bills it shouldn't be an issue.

James
@natdebtline

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Thank you so much!

National_Debtline

You're welcome. Good luck with your DRO.


James
@natdebtline