Panicking that bank may reduce overdraft!

GambledLife

i currently owe a large amount of money 33k to different credit cards and 4k to current account overdraft (where my wages are paid into) i have a schedule worked out to keep up with the min payments as not to start being charged interest on my 0% transfer cards, and to clear the overdraft.

Here is the ISSUE I have recently been told by a friend a bank can reduce / suspend your overdraft at any time and demand payment (I did Not know this), but i need the overdraft to pay rent and bills at least until june / july.

Overdraft amount: 4000 (Currently overdrawn by 3800)
Overdraft amount need / until date:

3500 - 26th jan (overdrawn by around 3170)
3000 - 26th feb (overdrawn by around 2500)
2500 - 26th mar (overdrawn by around 2000)
2000 - 26th apr (overdrawn by around 1500)
1500 - 26th may (overdrawn by around 1000)
1000 - 26th jun (overdrawn by around 500)
500 - 26th jul (overdrawn by around 0)

Further explanation of above:
I have 2205 plus paid into the account on the 26th of every month and a bit extra in December so i will start jan with a balance of around -1295 and on the 25th after all bills end on -3170 so for jan i want to keep a useable overdraft of 3500 just incase.

Questions:

Is it likely Halifax will force a reduce on my overdraft before june / july?
- its not interest free so I am paying for it 1p for every £7 used per day in negative.

If so is it likely they will reduce it by more then the value need each month (listed above)?
- is there anything I can do to stop them?

What happens if they reduce it on by more then I need to cover living expenses and minimum payments?

Should I let the bank know I still need the overdraft until this date?
- I'm worried if I do this it will let them no my financial difficulty's and they will reduce it then and there

please has anyone else encountered any issues being overdrawn that long and owning credit cards?

Shakin_Steve

A couple of things: What happens in June/July to change the situation? What happens when the interest free period ends on your cards?
You seem to be shuffling money around to service the credit cards but are you actually reducing the balances?
Having read your previous posts, you really need to be taking advice from both a gambling charity and a debt charity. Trying to sort this out yourself is a massive undertaking and the pressure must be enormous. At least you are facing up to your problems, but from reading about similar situations, you face a long road ahead. There is no need to travel that road alone.
As for your overdraft, any bank can withdraw that facility from anyone at any time and demand immediate repayment. But, if nothing changes, why would they?
Good luck.

binaryuniverse

A bank certainly can ask you to repay your overdraft at any time. They will give you warning of this. However, if you have a steady income coming in, and the overdraft is bringing them in a tidy amount, each month, I don't really see a reason for them to do so. They may reduce the amount you can use, but unlikely they'd remove it completely, unless you've given them reason to (i.e. some other credit cards/accounts have trashed your credit report, or fraud markers appear on it).

However, you can never be sure if/when that rug will be removed from under you. And yes, they are perfectly entitled to do so. How likely is it? None us here know. It's down to how your bank feel about it.

So, whilst you may be over-worrying about it, it is certainly a good idea to get out of that overdraft. So keep on with that plan. After the target date, you then have £500 a month that is actually your money. Then you can put that money in to a regular saver, to make you more money.

GambledLife

Shakin_Steve wrote: »

A couple of things: What happens in June/July to change the situation? What happens when the interest free period ends on your cards?
You seem to be shuffling money around to service the credit cards but are you actually reducing the balances?
Having read your previous posts, you really need to be taking advice from both a gambling charity and a debt charity. Trying to sort this out yourself is a massive undertaking and the pressure must be enormous. At least you are facing up to your problems, but from reading about similar situations, you face a long road ahead. There is no need to travel that road alone.
As for your overdraft, any bank can withdraw that facility from anyone at any time and demand immediate repayment. But, if nothing changes, why would they?
Good luck.

Hi in June / July i would have paid off the overdraft with a couple hundred for emergencies as a buffer so i will not need the overdraft anymore and will be asking them to remove it from the account so i am not tempted.

im considering the overdraft the most important as its 1p per day for every £7 over drawn, so just on that i will potentially be paying £5.71per day to keep from exceeding the limit (£177.01 per month).

in terms of the credit cards i have i am paying the minimum payment on all to avoid massive interest charges, but two of the cards are not 0% so I'm getting stung for about £200 combined interest on them (Paying £300 a month).

All that ontop of the fact that i will constantly be in my overdraft so if they lower it in any way I'm screwed.

I'm currently looking at step change (Recommending a DMP) but from what I'm reading creditors don't have to freeze interest or accept a lower payment so if they might not pay the minimum so could end up in worse shape.

GambledLife

binaryuniverse wrote: »

A bank certainly can ask you to repay your overdraft at any time. They will give you warning of this. However, if you have a steady income coming in, and the overdraft is bringing them in a tidy amount, each month, I don't really see a reason for them to do so. They may reduce the amount you can use, but unlikely they'd remove it completely, unless you've given them reason to (i.e. some other credit cards/accounts have trashed your credit report, or fraud markers appear on it).

However, you can never be sure if/when that rug will be removed from under you. And yes, they are perfectly entitled to do so. How likely is it? None us here know. It's down to how your bank feel about it.

So, whilst you may be over-worrying about it, it is certainly a good idea to get out of that overdraft. So keep on with that plan. After the target date, you then have £500 a month that is actually your money. Then you can put that money in to a regular saver, to make you more money.

Think i might take your advice and clear that overdraft before i do anything, I'm thinking i could get a bank account with NO Overdraft ability (if they let me have a bank) that not linked to any i already owe credit to and get wages payed into there? that way Iv always got the bills coverd, i can move the remainder into the halifax like it wold be anyway, ill end up paying more interest to Halifax I'm guessing many an extra £40 a month as interest is worked out per day but ill have protection from them taking my whole pay cheque when i still have bills to pay.

if they demand it ill have to say no and set up a payment pan (I assume thats possible) as its not secured debt.

enthusiasticsaver

An overdraft is repayable at any time and sometimes they will write and tell you they are reducing but you normally get some notice and if your salary goes in they probably won't. Halifax overdrafts are now more expensive though so I would suggest you prioritise repaying this over your credit cards especially if they are at 0%.

If Halifax do demand repayment before you have repaid it then you can open a basic bank account elsewhere and repay the overdraft monthly like a credit card. This will most certainly lead to a default though.

You could post on the DFW forum to get advice. I assume the debt was incurred through gambling? Are you getting help with this?

SuperHan

GambledLife wrote: »

Think i might take your advice and clear that overdraft before i do anything, I'm thinking i could get a bank account with NO Overdraft ability (if they let me have a bank) that not linked to any i already owe credit to and get wages payed into there? that way Iv always got the bills coverd, i can move the remainder into the halifax like it wold be anyway, ill end up paying more interest to Halifax I'm guessing many an extra £40 a month as interest is worked out per day but ill have protection from them taking my whole pay cheque when i still have bills to pay.

if they demand it ill have to say no and set up a payment pan (I assume thats possible) as its not secured debt.

This may make it worse - Halifax may have no issue with your overdraft providing they get your salary every month and it's your main current account.


They may be entirely less happy with a significant overdraft with little activity going through the account each month.


Given nothing has changed to make you worry now (other than you know more) I'd suggest you carry on as you are until Halifax suggest you need to do otherwise, as this may never happen.

GambledLife

enthusiasticsaver wrote: »

An overdraft is repayable at any time and sometimes they will write and tell you they are reducing but you normally get some notice and if your salary goes in they probably won't. Halifax overdrafts are now more expensive though so I would suggest you prioritise repaying this over your credit cards especially if they are at 0%.

If Halifax do demand repayment before you have repaid it then you can open a basic bank account elsewhere and repay the overdraft monthly like a credit card. This will most certainly lead to a default though.

You could post on the DFW forum to get advice. I assume the debt was incurred through gambling? Are you getting help with this?

i am taking the nessocery steps to get help with my gambling addiction and thats what I'm going to to but i will at the very least need to pay the minimum payments on all to ensure thay stay a 0% thats about 860 in payments.

If i have an account with another bank (say Santander or one not owned by the same company like lloyds and halifax are) i assume that halifax can't just take all my money from that account? if they can this dent solve my main issue.

PeacefulWaters

While you're funding the account with salary and reducing the overdraft balance its highly unlikely that they'll pull the plug on your overdraft limit.

Given their new overdraft charging structures will exceed the cost of interest bearing credit card balances, the thinking of paying down the overdraft as quickly as possible is highly logical.

enthusiasticsaver

GambledLife wrote: »

i am taking the nessocery steps to get help with my gambling addiction and thats what I'm going to to but i will at the very least need to pay the minimum payments on all to ensure thay stay a 0% thats about 860 in payments.

If i have an account with another bank (say Santander or one not owned by the same company like lloyds and halifax are) i assume that halifax can't just take all my money from that account? if they can this dent solve my main issue.

If you arrange for your salary to go elsewhere this may alert Halifax and cause them to recall the overdraft which you don't want them to do until you have repaid it. Given they have not said they are going to recall it and you are not exceeding your overdraft limit there is no reason to assume they will pull it so I would keep on managing your current account as now and reduce the limit as you say you can above until the middle of next year. If they write to you saying they are reducing or recalling it they always give you notice, normally 2 months so then you can decide whether to open a bank account elsewhere.

If you pay £860 on credit card minimums and £500 to the overdraft does this allow you enough to pay your other bills? Rent, utilities, food and travel?

GambledLife

enthusiasticsaver wrote: »

If you arrange for your salary to go elsewhere this may alert Halifax and cause them to recall the overdraft which you don't want them to do until you have repaid it. Given they have not said they are going to recall it and you are not exceeding your overdraft limit there is no reason to assume they will pull it so I would keep on managing your current account as now and reduce the limit as you say you can above until the middle of next year. If they write to you saying they are reducing or recalling it they always give you notice, normally 2 months so then you can decide whether to open a bank account elsewhere.

If you pay £860 on credit card minimums and £500 to the overdraft does this allow you enough to pay your other bills? Rent, utilities, food and travel?

it does yes i will have enough to get by, so i should be ok. i hope your right if they do decide to reduce it / freeze it over night there must be something i can do as ill affectively be homeless with many more charges on cards.