How to get out an overdraft?

Debtoverit

sourcrates said:

If your OD is becoming more of a problem, than just a minor irritation, then there are steps you can take yourself to get out of this situation.

Its pretty simple, and along the lines of whats been discussed above, you open a new, basic bank account, with a lender with whom you have no debt, then transfer all your income, outgoings etc over to this new account (do not use a switching service, as you have an open OD, do it manually yourself).

Your old account then just becomes another unsecured, non priority debt to deal with, your bank will simply close the account after a while, and it will be passed to a debt collector, or the internal collections dept of the bank, you can then choose to pay what you can afford to it, once defaulted, all interest will stop, the only negative effect will be on your credit file, so if thats important to you, then you need another approach.

It’s the defaulting that scares me, not the effect ok my credit file as it’s shot anyway, but I’ve had friends with bad experiences of defaults. 

Would it still default if I was still making small payments into the account and paying the fees, but not using it as my main account? 

TheAble

I don't think so, as long as you stay within your limit. But bear in mind the bank can pull the overdraft.
How much are you overdrawn?

Debtoverit

This might sound really silly, but what would happen if they pulled it? Would that result in a default? Me and my partner both have a £2000 one each, racked them up while at uni

sourcrates

Debtoverit said:

This might sound really silly, but what would happen if they pulled it? Would that result in a default? Me and my partner both have a £2000 one each, racked them up while at uni

What exactly is it that scares you about a default ?

Its simply a process you go through in order for the account to be sent to collections, nothing to fear whatsoever, it would be the same if the bank pulled the OD from under you, they would demand immediate payment in full, although in reality a payment plan would usually be agreed.

The reason you want this to default is so that all charges and interest stop.

You need not fear anything where banks are concerned, its not like they will send the boys round with long sticks is it, its just a means to an end.

Debtoverit

What exactly is it that scares you about a default ?

I worry about ending up going to collections. I don’t want to be worrying about things such as bailiffs and collectors knocking on my door asking for money that I don’t have. This was the experience my friend went through and it terrifies me. I am happy to pay the money back, I just can’t as quickly as they would like. They offered me a plan for a year, but that was £166 each a month which I can’t do, alongside all the other debts. Once I’ve halved it the payments would become manageable to pay over one year  and I could stop the interest 

sourcrates

Debtoverit said:

What exactly is it that scares you about a default ?

I worry about ending up going to collections. I don’t want to be worrying about things such as bailiffs and collectors knocking on my door asking for money that I don’t have. This was the experience my friend went through and it terrifies me. I am happy to pay the money back, I just can’t as quickly as they would like. They offered me a plan for a year, but that was £166 each a month which I can’t do, alongside all the other debts. Once I’ve halved it the payments would become manageable to pay over one year  and I could stop the interest 

Most likley because the freind wasn`t paying anything, bailiffs cannot be engaged until a CCJ is in place and you still fail to pay, likewise debt collectors (who possess no power whatsoever) usually work from a call centre, very few companies actually still knock on doors, resolve call, who get mentioned on here a lot, are one, but there may be one or two others who still do it.

To put this into some perspective for you, some 88% of defaulted debts never see a court room, and you have more chance of winning a substantial lotto prize than have a DCA knock on your door, its very easy to set up a payment arrangement with a debt collector, and they won`t refuse what you offer, forget bailiffs, doorstep callers, and the like, if you want to pay a sum you can afford, then what i have suggested is the way to do it.

Its about you taking control, not them.

Lydia42

Hi
We bank with Santander. If you have online banking you should be able to request a change to your overdraft limit at any time at the click of a button. We did this to reduce our overdraft gradually over time on our terms. It's now set at £50 just in case. It was £4000.

Debtoverit

sourcrates said:

Most likley because the freind wasn`t paying anything, bailiffs cannot be engaged until a CCJ is in place and you still fail to pay, likewise debt collectors (who possess no power whatsoever) usually work from a call centre, very few companies actually still knock on doors, resolve call, who get mentioned on here a lot, are one, but there may be one or two others who still do it.

To put this into some perspective for you, some 88% of defaulted debts never see a court room, and you have more chance of winning a substantial lotto prize than have a DCA knock on your door, its very easy to set up a payment arrangement with a debt collector, and they won`t refuse what you offer, forget bailiffs, doorstep callers, and the like, if you want to pay a sum you can afford, then what i have suggested is the way to do it.

Its about you taking control, not them.

Thank you so much for clearing this up for me, this is very unlike the horror stories I have heard. I will definitely look further into it. Without the fees I think I could reduce them in a reasonable time frame. I really appreciate all the time you have given

Debtoverit

Lydia42 said:

Hi
We bank with Santander. If you have online banking you should be able to request a change to your overdraft limit at any time at the click of a button. We did this to reduce our overdraft gradually over time on our terms. It's now set at £50 just in case. It was £4000.

Thank you, I have just had a little look on my online banking and found that I can also do this. I like the idea that I can watch it disappear 

the_long_and_winding_road

Lydia42 said:

Hi
We bank with Santander. If you have online banking you should be able to request a change to your overdraft limit at any time at the click of a button. We did this to reduce our overdraft gradually over time on our terms. It's now set at £50 just in case. It was £4000.

Hi Debtoverit, sorry late coming back. I do exactly as Lydia42 says above. Online banking and go to manage overdraft. I just reduce in £50 multiples by what I can afford each month. I don’t speak to Santander. Fingers crossed it’s working for me. I started off at £2,200 and now at £1,850. I know a lot but chipping away at it. Good luck with it!