Bank account closure in DRO??

Lauraboncath

Hello all,
My partner is looking into a DRO (awaiting pack from StepChange, DRO was the recommendation option)

He seems to fit all the criteria, however to took out a 'lending stream' loan last week to help pay his credit card min payment :huh:

I'm assuming that this will be a red flag as he knew he was insolvent at the when he accessed the credit?

He has a barclaycard, maxed out- and a Barclays current account, no overdraft....what is the likelihood of his current account being closed down due to the barclaycard debt?

Thanks

National_Debtline

Hi Laura and welcome to MSE,


We would suggest that your partner changes bank accounts as a precaution as the bank is less likely to withdraw his bank account (because of the DRO) if he has no debt with them. Even if Barclays didn't withdraw his account after the DRO (which is possible) his money is not safe with them now. At this time Barclays can go into his current account and take money for the credit card (the right of set off), so moving banks is very important.


The lending stream loan will be assessed by the intermediary and if they think that will be an issue they should discuss it with him. Lending Stream may object to (being included in) the DRO but whether the insolvency service with accept that, is discretionary.

As well as changing banks your partner should ensure he writes to the bank and cancels the continuous payment authority to prevent Lending Stream accessing his account. Good luck,


Laura
@natdebtline