About to enter DMP, can bank withdraw funds from my account?

colink24

Hi


I am about to enter into a DMP with Stepchange. Everything is arranged with them and they are currently sending out letters to creditors.


I am behind on a loan with my bank, Ulster Bank, and I also hold my current account with them, which is a joint account with my wife. The loan is solely in my name. I called the bank this morning, as I missed the last payment and the one due 2 days ago. The guy said to me that he can move money from my current account to clear the arrears but I told him no, as the funds are for other expenditure and debts. However it has got me concerned that the bank will just take the money from our joint current account to clear up the arrears. Are they allowed to do that? Should I transfer the money to a separate account with another bank?


Any help appreciated.

Thanks

EssexHebridean

In normal circumstances the advice would be to open a basic bank account with a different provider to who you owe nothing, I believe, and ensure that your salary etc is paid into there. Because this is a joint account though I'm none too sure what the score is. I suspect there will be someone along shortly who knows, though.

sourcrates

Always best to not bank where you have debts if your entering any kind of debt solution.

The fact it's a joint account may not stop the bank from using the right of set off, it's a pretty shady area of law as to what a bank can or can't do.

To be safe, I'd put the money elsewhere ASAP.

National_Debtline

Hi

I agree it’s safest to bank elsewhere. The FCA guidance called the Banking Code of Business Sourcebook does seem to suggest a bank can use their right of set off for a sole debt on a joint account, providing they’ve explained this prior to the contract being agreed. This may be part of the terms and conditions of the account.

James
@natdebtline