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Overdraft fees changing - help

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Overdraft fees changing - help

6 replies 131 views
Hi,
my partner has a bank account overdraft limit of £200. The overdraft was used pretty much to the max for the past few years as no job/income and not entitled to benefits. There are a couple of direct debits coming out of the account and I always transfer the needed amount from my account so they can be paid plus enough money to cover the overdraft fees (currently around £4/month but it varies a bit every month).

Most of our bills, rent, food etc is paid from my account (no overdraft). After paying all of the bills there is only around £10 a month left (£4 go towards the overdraft fees, so that leaves only £6 for emergencies). We don't have enough money left to pay off the overdraft in full (been trying for years but 2 adults living on a single income is not easy) and with the fees changing soon, I'm worried we will not be able to pay the new monthly fees. In the past we contacted the bank to see if they would help (like waiving the fee for a while etc but they said there was nothing they could do).

What are our options? We cut back on all luxuries years ago when my partner lost job (no Sky, holidays, cinema, take-aways, new clothes unless absolutely needed etc) and we sold loads of stuff on ebay, we have nothing left to sell anymore. We were also forced to move to a cheaper house as the rent was too high (on single income, it was ok previously with both of us working).

The bank can clearly see the overdraft has been maxed out for years with only enough money being paid in to cover the DDs coming out + fees. I really don't know how we're going to cope... 



Replies

  • masonicmasonic Forumite
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    It sounds as though you are currently living within your means with the exception of this legacy borrowing, which presumably is stable and not increasing month by month? So if you are able to shift this overdraft you'd be in a position to contribute £4-£10 per month to paying it down?
  • Peggy0628Peggy0628 Forumite
    60 posts
    Part of the Furniture 10 Posts
    Hi,
    the overdraft amount is not changing. I always transfer in enough money needed to cover the DDs and fees, but nothing else. It's currently just a bit over £190 so paying in extra £6 (in addition to the £4 fees) is not really going to do much difference to the total owed...
    If we could get the fees stopped, we could pay off £10 a month (it would take almost 2 years to pay if off this way) but the bank can't/doesn't want to stop the fees (they need to make profit, I get that but we paid over £200 in fees over the years already and the amount owed is still the same)...
    Neither of us has a credit history good enough to get a credit card or loan (unless it's one of those terrible pay-day loans with sky-high interest rates) and we have very little disposable income (if £6 can be even considered that)... 
  • eskbankereskbanker Forumite
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    If you haven't done so already, read through https://www.moneysavingexpert.com/banking/cut-overdraft-costs/ and consider completing a Statement Of Affairs and posting it on the debt-free wannabe board for other ideas about how to address debts.
  • born_againborn_again Forumite
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    You can but ask the bank for help. Just what they will do is no one's guess. But you need to do something. 
  • edited 15 February at 9:23PM
    masonicmasonic Forumite
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    edited 15 February at 9:23PM
    Peggy0628 said:
    If we could get the fees stopped, we could pay off £10 a month (it would take almost 2 years to pay if off this way) but the bank can't/doesn't want to stop the fees (they need to make profit, I get that but we paid over £200 in fees over the years already and the amount owed is still the same)...
    Yes, the key is finding a more affordable option. You've mentioned the bank will not waive the fees, but have you approached them about taking out a personal loan at a more affordable rate, which you might be able to pay off over a few years? Ultimately, they could be faced with an IVA and debt forgiveness down the line, so it is in their interests to help you help yourselves. The other avenue is friends and family, although I appreciate that is difficult.
    You've done a lot already to cut your expenses, but eskbanker's suggestion is worth considering as their might be something further you can do, even temporarily.
  • StokieBecksStokieBecks Forumite
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    Why aren't you eligible for benefits? 
    £2 Savers Club for 2020 #53
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