Santander and DMP

LilMissM

I have recently taken out a DMP which is due to start on 1st April. Included in the DMP is my £750 overdraft with Santander, of which I had used just over £700). The bank have now removed the overdraft option but is still showing as being overdrawn. I have applied for another basic bank account with Co-op but was wondering if Santander will automatically take any money coming into the Santander account (like my wages etc) and just use that to pay off the overdraft? Right at this moment I literally have no access to any money at all and I do not get paid until the 25th of this month. I am understandably panicking and very upset. Upset that I have sadly found myself in a situation where I need a DMP (but trying to look on the bright side and see being debt free in a couple of years) and very worried and concerned that I have literally not a penny until I get paid and then worried if Santander will take it straight off me, even though they are included in my DMP.

I am going to ring Step Change who have arranged the DMP for me and get advice from them, but until I know whether I can get a new bank account for direct debits, wages etc, I don't know what to do.

Can anyone offer any advice because right now all I feel like doing it crying  

fatbelly

Your salary this month needs to be paid into an account not linked to your debts.

You know that Santander have withdrawn your overdraft facility so you will not have access to £700 of your salary if it goes into that account

The coop account should be set up in the next week or two but if that all becomes too tight, do you have a family member whose account you could use?
 

LilMissM

I could probably ask my Mum if I can use her account temporarily for my wages this month, but all my bills and rent etc come out by direct debit and standing order from my Santander account. What would I do about them until the Co-op account is sorted? And what if the Co-op do not let me have a new basic account?

Thank you for your help and advice.

LilMissM

I feel like I am suffocating

Rob5342

I'd cancel the DMP, wait for the debts to default and build up an emergency fund before starting a DMP again. Stepchange rush people into starting DMPs before they should.

Have you looked at opening an account with Starling, Monzo or Chase? You can be up and running in 10 minutes with them. 

LilMissM

I have applied to the Co-op but it says it will take a couple of days to review etc. I will have a look at Starling and Monzo and Chase now. 

Thank you for the advice, it sounds like good advice that I should have sought before looking into a DMP. StepChange did not rush me into anything to be fair, but I did ask them NOT to include Santander in the DMP because I have been with them for years and they have let me reduce my overdraft in the past each month. They did not reply to my request, or to any other email I sent them actually. But a DMP felt like the right thing to do because I am clearly terrible with money and don't know how to get myself out of this mess and straight again.

Rob5342

DMPs can be a very good solution, but we.usially recommend stopping paying and waiting for debts to default before starting one. That gives you a chance to build up an emergency fund and is also much better for your credit report in the long term.

If you can make it to pay day then you could have a few months of putting what would have been the DMP payments into a savings account, and have that money to fall back on when you start one later.

Could you ask your employer for an advance, they may consider that as a one off. You'd have to be extremely careful of it knocking on and not leaving  you enough the next month, but it may be a way through if you hold off on starting the dmp.

LilMissM

I see, I thought it would be better to avoid missed payments, default etc, but it does kinda make sense when you hear someone else say it. I am just applying to Monzo now. I'm so worried I won't get another bank account to have my wages paid into and my bills and rent paid out of

Thank you so much for your help and advice.

RAS

Come back and let us know you are OK. You need to talk to HR first thing on Monday, as they may still be able to sort things out for you this month.

Re not defaulting, it's a whim of the reporting system.

If you pay part of the money each month you get arrangement to pay (AP) markers. These stay on your credit record for 6 years after the last marker, usually when the debt is paid off.

If you let the debts default, the defaults clears from your credit record after 6 years, even if you don't pay the debt off. Which can be a lot sooner than the AP markers would fall off

Apart from the practical matter of getting a clean credit record quicker, psychologically a lot of people find it easier have a definite date to count down towards rather than stressing because every time there is a little glitch that delays their end date again.

LilMissM

Morning everyone, just a little update. I now have a bank account with Starling bank and have started the switch and close old account option with them. So all my direct debits and standing orders will be automatically transferred across to my new bank and should all be done by 19th March. Will change my bank details in work on Monday so there's plenty of time to amend my wages which are due on 25th.

One question though, my mum has a standing order to my Santander account (due on 11th each month). She has cancelled the standing order but it said the payment for 11th March will still go ahead because its too short notice to cancel, but all future ones will be cancelled. Will Santander take this money and use it off my overdraft or is there any way I can get this sorted to pay into my new bank? It's £300 which is a lot of money and money I desperately need right now.

fatbelly

She needs to talk to her bank.

Santander have removed your overdraft facility and you are £700 in the red, so any sum less than that going in will not be coming out