Bank closed my account - what should I do?

danski39

Hi,

I had my current account with one of the big five high street banks since the early nineties. Had an overdraft limit of a couple of grand for much of that period and often made full use of it. Also used same bank for my business for many years until business went to wall a few years back. In Feb 2024 they closed my account as I was over my overdraft limit by about £125 for a couple months. At that point I had no income,  and had no phone for a period of months which made comms harder, tho I was also letting unopened mail build up. In short I didn’t realise until months later as I wasn’t using my account that it had been closed. 

I do feel that after 30 years banking with them closing the account due to a relatively small exceeding of overdraft limit feels draconian. 

I’ve not had any correspondence from the bank since Feb, so I don’t know what stage they are at in process to retrieve debt. Obviously I need to engage with them and agree a plan. Is it optimistic to hope that reactivating the account is a possibility at this stage? Obviously I need a bank account generally, and specifically to manage the sorting out of other arrears etc.

Im trying to sort out a basic account elsewhere just to get back on the grid, but how should I approach things with my old bank? 

Thanks for any sage advice you can offer…

Mark_d

An overdraft is for short-term borrowing and unlike a loan, it can be recalled at any time.  You have been using your overdraft more than you should and when you went over the limit, with no income coming in, the bank had reason to get concerned.  Closing your account protected the bank and it also protected you from getting into more expensive debt.

You need to try to repay the with your old bank.  I don't know whether they've passed the debt on to a debt collection agency.  Time to open and read all that mail!

Going forwards, why do you want to reactivate your old account?  I don't know if this will be possible even if the back accept you back as a customer.

Chase bank apparently don't do credit checks, and they are highly rated, so I would consider moving to them for your banking.

sourcrates

Bank will write to you eventually, overdue accounts can take some time to default, I would consider that account lost, so you will need to find banking facilities elsewhere.

They may retain the debt, but will most likely assign it to a debt collector.

Hoenir

danski39 said:

I do feel that after 30 years banking with them closing the account due to a relatively small exceeding of overdraft limit feels draconian. 

You never opened your mail. Business relationhips work two ways. Ignoring someone totally is a nailed on way of achieving a negative outcome. No one is going to waste their time playing games. 

danski39

Mark_d said:

An overdraft is for short-term borrowing and unlike a loan, it can be recalled at any time.  You have been using your overdraft more than you should and when you went over the limit, with no income coming in, the bank had reason to get concerned.  Closing your account protected the bank and it also protected you from getting into more expensive debt.

You need to try to repay the with your old bank.  I don't know whether they've passed the debt on to a debt collection agency.  Time to open and read all that mail!

Going forwards, why do you want to reactivate your old account?  I don't know if this will be possible even if the back accept you back as a customer.

Chase bank apparently don't do credit checks, and they are highly rated, so I would consider moving to them for your banking.

Thanks Mark. I’ve opened every bit of mail that accumulated on Sunday - and have since been starting to engage with all the people and organisations I need to contact and teyint to work out solutions. So as to bank I do now have as clear a picture as the snail mail trail to date can provide - unless items have gone missing in post which has certainly happened to me at current address on various occasions. But the big picture is clear enough. They did say they’d sent an email with all transactions but those went to an account that is no longer active and which i havent yet figured out how to retrieve via gmail. Same applies to any other emails they may have sent. Because my phone was cut off at that point and I didn’t have active email. I know from outside it may all seem flakey - yes opening post is a basic - but it was all happening at a particularly low point - in winter when I was struggling also for heat and food (not uncommon,  I know but still real contributing factors to the way one tackles life at times.


Can anyone tell me whether negotiating repayment of a bank overdraft debt on a closed account is the same as negotiating a similar debt on a closed credit card? Proposing an affordable repayment plan? Is it fair to assume it’s easier to do this with bank than with any proxy they appoint?

Should I pick up the phone to them in first instance or write to them?

Basic and maybe stupid questions I realise, but I’d appreciate any guidance…

Im in early stages of talking to stepchange - but I read mixed conclusions in the forum here about whether it’s better to go via an intermediary and consolidate or tackle individual situations directly. Again any views on this wld be most appreciated.

ManyWays

What was your overdraft for the previous couple of years, if you were in it all or most of the month then you may have a possible irresponsible lending complaint see https://debtcamel.co.uk/get-refund-overdraft/

The question about what to offer the bank or to use Step Change depends on how large the rest of your debts are, it would help if you could post an Income / Expenses form here https://www.lemonfool.co.uk/financecalculators/soa.php

stymied

Most importantly don't pay anything to these old, unsecured debts, including the overdraft unless you can afford to do so i.e. you have a surplus after paying your essential bills and food, heat etc.

Also, from what I've learnt on these forums there's no rush although you do need to keep opening your post to check for before action letters.