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First post - Overdraft

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Hello,
Just joined, this is my first post.

I'm not in a mountain of debt, and before my husband lost his job we had a good handle on it but I can feel it getting worse and worse the longer it takes him to find a job. We have a lot less money spare to put towards debt & the main problem is my overdraft. If I didn't have an overdraft I could clear our debts in less than a year but I cannot for the life of me get out of it. It's between £300-400 a month but every month it takes away such a huge chunk of my pay.

I've done an SOA, not sure how to link it here though... I copied and pasted.

Impulse buying is a problem I am slowly & surely getting over. I haven't done it in a while and no longer just buy things, I stand and think about it before getting it and it's saved me a lot of money over the last few months.
I wasn't sure how to put the overdraft into the SOA form, but if I could just get out of it things for next year would be a lot easier.

Any advice at all is truly welcomed & appreciated.


Summary

Monthly Budget SummaryAmount(£)Total monthly income1,500Monthly expenses (incl. HP & secured loans)1,078.53Available for debt repayments421.47UNsecured debt repayments380Amount left after debt repayments41.47Personal Balance Sheet SummaryAmount(£)Total Assets (things you own)2,500Total Secured & HP Debt-2,810.21Total Unsecured Debt-2,090Net Assets-2,400.21Household Information

Number of adults in household2Number of children in household1Number of cars owned1Income, Expense, Debt & Asset Details

IncomeAmount(£)Monthly income after tax1500Partners monthly income0Benefits0Other income0Total monthly income1500ExpensesAmount(£)Mortgage0Secured/HP loan payments107.53999999999999Rent293Management charge (leasehold property)0Council tax154Electricity54Gas40Oil0Water Rates0Telephone (land line)0Mobile phone0TV Licence14.14Satellite/Cable TV0Internet services38.99Groceries etc.200Clothing10Petrol/diesel80Road tax9.87Car Insurance47Car maintenance (including MOT)10Car Parking0Other travel0Childcare/nursery0Other child related expenses0Medical (prescriptions, dentists, opticians etc.)0Pet Insurance/Vet bills0Buildings Insurance0Contents Insurance9.99Life Assurance0Other Insurance0Presents (birthday, christmas etc.)10Haircuts0Entertainment0Holiday0Emergency Fund0Total monthly expenses1078.53Secured & HP Debt DescriptionDebt(£)Monthly(£)APR(%)Mortgage0 (0) 0Secured Debt1610.21 (57.54)0HMRC Overpayment1200(50)0Secured & HP Debt totals2810.21 - - Unsecured Debt DescriptionDebt(£)Monthly(£)APR(%)Barclaycard1740300Overdraft3503500Unsecured Debt totals2090380 - Asset DescriptionValue (£)Cash0House Value (Gross)0Shares and bonds0Car(s)2500Other assets (e.g. endowments, jewellery etc) 0Total Assets2500

Comments

  • The SOA doesn't seem to work when I paste it... :(
  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    Tenth Anniversary 1,000 Posts Combo Breaker
    Hi Mananasi and welcome to MSE,


    You can open a new basic bank account with a different banking group to your current bank account and make that your new account. You won't be able to close the one with the overdraft until the overdraft is cleared but when you don't 'lose' part of your pay each month you should find it easier to repay the overdraft with proportional, affordable monthly payments.


    There is a risk that if the bank calls the overdraft in quickly (which is their right whether you bank with them or not) and you don't have the money available then this could damage your credit file. But the bigger issue would be if they withdrew some/all of the overdraft facility and you were still using the account, this could really affect your affordability.


    Laura
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • Thank you for that.

    I've been doing a bit of research and First Direct seem to be really highly rated & they have a cashnback offer which could knock £100 off my overdraft straight away.

    Is anyone here with First Direct?? It feels strange going with an all online bank but they have such good reviews & ratings.

    I worry what Halifax will do about my overdraft when they get the notice that I'm switching bank. Do they have the right to demand I pay the overdraft back in full??
  • You won't be able to switch banks without clearing your overdraft. You can open the first direct account but won't get the switching bonus unless you use current account switching service and close the Halifax down which you can't do unless First direct take over the overdraft which defeats purpose of keeping overdraft separate from monthly spend.

    I am with first direct and had no issues in doing a switch and they paid the bonus within 3 weeks. I would suggest you open just a basic account with anyone and pay your wages and bills in there and reduce your overdraft monthly until cleared then switch to FD. That will help you see the overdraft reducing. Either that or maybe reduce overdraft limit on Halifax month by month so say you restrict yourself to maximum £250 next month, £150 and so on until cleared. Then focus on barclaycard.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.

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  • I don't think you should consider switching bank accounts in your current situation. It's a condition of most (probably all) switches that you close the "donor account", and this would mean that your overdraft would need to be repaid in full before the bank (Halifax in this case) would close your account.

    I second the advice to open a new Basic Bank Account with another provider and do your best to pay down your overdraft completely before considering a switch.

    I banked with First Direct until recently and had no issues switching to and away from them, but I do know quite a lot of people who have had accounts with them declined, so best not to take a chance at present I'd say.
  • Thanks very much for the response guys, I'll keep trying to find ways to chip into my overdraft before switching bank accounts!
  • sourcrates
    sourcrates Posts: 31,601 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    Hi,


    I`m sorry I cant make head nor tail of your SOA.


    You need to go back and format it for MSE.


    Assuming your main problem is your overdraught, the thing most people do is to open a new basic bank account, which I see you are looking into, make sure its with a bank you have no debt with.


    The old account overdraught can then be considered just another unsecured debt to service.


    Try and agree a monthly amount your old bank would be happy with, you should also write and ask for the account to be frozen so no more charges or interest will accumulate on it.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
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