asked to repay overdraft

starting_again_in_the_sun

Apologies if I am posting this in the wrong place.

I have just been asked to repay the overdraft on my Santander graduate account and was wondering what will happen next as I can't pay it off in one lump.

I moved to Spain last September and notified Santander within a few weeks, at that point I had a £2000 overdraft limit and was £500 overdrawn. My overdraft limit decreased in line with the account around November to £1600.

About a month ago I took more money out of the account as I have found a much better job in a different area but have to cover moving costs etc. The overdraft stands at £1275/ £1600 and I recently received a letter saying it will become 'unarranged' on the 1st September.

As I understand it, Santander have to be reasonable when asking me to pay it back so what are the likely to say when I phone them? I don't get paid until October so can't pay anything until then....

Will this affect my credit file? And does it matter as I'm not planning to return to live in the UK?

Thank you!

MaudeLebowski

All you can really do is call them to explain the situation. I think their definition of "reasonable" is them giving you a month to pay it off. I think their issue might be that you knew the graduate account could only be held for a max of three years, so I guess they'd want you to have started paying it off before now.


I was in a similar situation, but it was 10 years ago. Santander were actually pretty helpful as far as banks go. I needed another month to pay it off, so instead of making my overdraft "unarranged", they just took away the interest free bit. Luckily for me the fees were less then. The fees now for a regular overdraft are £1 a day.....


Just call them; it's in their interests to get their money back and keep you banking with them. I think going into an unarranged overdraft will affect your credit file adversely, but chatting with them first should hopefully help avoid this!


Good luck!

sourcrates

Hi,

Just agree to repay a sum on a monthly basis, that you can afford.

You should also ask them to stop charging interest, or imposing unreasonable charges as well.

It's better to put all this in a letter, so you have a record of what's been agreed.

The bank is obliged to treat you fairly yes, it won't hurt to remind them of that fact.

National_Debtline

Hi there,


So once the overdraft is called in the money falls due in a lump sum. If you cannot afford to pay that then you will need to arrange to pay what you can afford. This could damage your UK credit file and result in it being recorded as a default or arrangement in place. This shouldn't affect your Spanish credit file.

Technically, a debt like this could be chased internationally, and could be passed to an organisation in Spain or a CCJ obtained in the UK and then passed to the Spanish court for enforcement - if that happens you will need some local advice. Creditors will weigh up the cost of doing this versus how much is owed, and it isn't an especially high amount. Good luck,


Laura
@natdebtline

starting_again_in_the_sun

Thank you all for your advice.

Just to clarify, I have only held the account for 2 years and it is supposed to last for 4 years; they have probably recalled the overdraft because I'm not using it as my main account. However, this has been the case since September.

Perhaps I'm wrong but it seems unfair that they could take me to court if I have made an arrangement to pay?

I have read that it is seen differently if I pay it off within 3 months.... could someone explain please?

sourcrates

They won't take you to court, if no payment is made, usual practice is to pass the debt to a debt collection agency, and get them to attempt collection.

starting_again_in_the_sun

Ok, thanks.

National_Debtline

The bank has the right to call in an overdraft at any point, so unfortunately, that is what they are doing here. I should clarify that the bank will not try and take court action as a first step but eventually, court action could become a risk if it remains unpaid. The fact that you are making a monthly offer does not prevent them going to court, I am afraid. But if you could repay it very quickly then it is unlikely that it will go that far.


Try and do a SOA, I know that you will have to convert from Euros to Pounds which can make things harder but you need to work out what you can afford. Email the bank and offer to repay what is affordable; unfortunately, there is no rule that you must be given 3 months to repay.


Laura
@natdebtline

starting_again_in_the_sun

Thanks Laura,

The reason I mentioned 3 months is that on the experia website it states under 'amber rating 2-3' that "Your overdraft balance has been greater than your overdraft limit for two to three months" and under 'red rating 4-6' that "Agreed repayments are more than three months behind but you have agreed new repayments with the lender to bring the account in order". This suggests to me it's better if paid off within 3 months?

I understand that they have the right to take me to court but just think it's unlikely if I am making agreed repayments; the Spanish legal system is also much kinder to debtors. The time scale I am speaking of is 6 months max, rather than years.

I will do an SOA once I know how much rent will be when we move