what happens to an overdraft facility if one partner on a joint account dies?

Jikkie

I have been too frightened to tell Intelligent Finance that my husband died (3 years ago) because there is an overdraft facility on the account of £4,500 and I am using it (about half of it) and have no way of paying it off if they demand repayment.  All I can find out online is that the account wouldn't frozen, which is a start, but i need to find out about the overdraft and can hardly ask them!  Does anyone know?

Socajam

I would say that you will have to repay the overdraft - its a joint account and you have used their money.  They may also cut the overdraft or look at your finances and decide to ask you to repay all of it.
My advice would be to scale back how much you are using the overdraft because the more you continue to use it, the more you are putting yourself in a drowning position, as someone who have been through this, you really don't want to do there.
Why not post your SOA and the knowledgeable folks on here would help you to see where you could make cuts to your budget and dig yourself out of this hole.

colsten

Your questions will be answered by the T&Cs https://www.if.com/pdf/iftermsconditions.pdf

You should take pro-active action before they force you into doing something about the overdraft (incl possibly freezing/closing the account, and/or demanding repayment of the overdraft). Start by posting a Statement Of Affairs on the Debt Free Wannabee board

eskbanker

Before coming clean with them (as you know you need to), ensure that you open an account with another bank, in order to be prepared in the event that IF decide that they no longer wish to retain your custom....

Jikkie

Thank you all. Sounds pretty grim.  I have bank accounts elsewhere, huge debts (please don't judge, all down to problems with various properties, and under control as far as they can be, paying small £x to all creditors by informal agreement).  I live on state pension.

bonkersbonkers1

Once they hear about the deceased they will freeze the account if it is overdrawn.
It is a good idea to transfer payments in and out to a new / other account before you tell them.

colsten

bonkersbonkers1 said:

Once they hear about the deceased they will freeze the account if it is overdrawn.
It is a good idea to transfer payments in and out to a new / other account before you tell them.

Looking at the T&Cs, I don't think that would be a given. Though they would probably want to know why it took 3 years to get notified. So it might be best to 'forget' telling them for a bit longer, until you have sorted out how you would settle the O/D.

If you de-camp to another bank and don't reduce the O/D, you might well get a demand for immediate repayment. So try to reduce the O/D a bit every month until you have figured out how you can improve your situation. Have you been to Citizens Advice, or to a debt charity?

bonkersbonkers1

colsten said:

bonkersbonkers1 said:

Once they hear about the deceased they will freeze the account if it is overdrawn.
It is a good idea to transfer payments in and out to a new / other account before you tell them.

Looking at the T&Cs, I don't think that would be a given. Though they would probably want to know why it took 3 years to get notified. So it might be best to 'forget' telling them for a bit longer, until you have sorted out how you would settle the O/D.

If you de-camp to another bank and don't reduce the O/D, you might well get a demand for immediate repayment. So try to reduce the O/D a bit every month until you have figured out how you can improve your situation. Have you been to Citizens Advice, or to a debt charity?

If the account was in credit I agree - but it is a banking rule that an overdrawn joint account will be frozen to crystalise the debt.
Sorry can't remember the case law.

colsten

bonkersbonkers1 said:

colsten said:

bonkersbonkers1 said:

Once they hear about the deceased they will freeze the account if it is overdrawn.
It is a good idea to transfer payments in and out to a new / other account before you tell them.

Looking at the T&Cs, I don't think that would be a given. Though they would probably want to know why it took 3 years to get notified. So it might be best to 'forget' telling them for a bit longer, until you have sorted out how you would settle the O/D.

If you de-camp to another bank and don't reduce the O/D, you might well get a demand for immediate repayment. So try to reduce the O/D a bit every month until you have figured out how you can improve your situation. Have you been to Citizens Advice, or to a debt charity?

If the account was in credit I agree - but it is a banking rule that an overdrawn joint account will be frozen to crystalise the debt.
Sorry can't remember the case law.

Sorry, there is no ‘banking rule’ or ‘case law’ for this. The rules that apply are laid down in the T&Cs, a link to which I have posted earlier. 

Jikkie

The debt was after the death... it was caused by a lousy rental property on which I continued to pay the mortgage each month.  It is reducing somewhat each month, not as fast as I would like.  I rather expect they would discuss with me, but they would want "immediate" settlement.  I have arrangements for other creditors, but I don't think banks are in the business of accepting small payments each month based on a budget are they.... and therein lies the problem.  I need not to trigger any creditor into taking bankruptcy proceedings, as I would then lose my house.  Not nice at 68.

colsten

You can reduce your overdraft by small amounts without having a repayment arrangement with the bank. The important point is that you act before you are forced to act.

Your circumstances sound complex and you might get more meaningful ideas by talking to your local CAB or to a debt charity. Also, as I said before, go to the Debt Free Wannabe board.