Will default automatically lead to current account closure?

PanAction25

I have two separate loans with HSBC:

loan 1 : £17,480 (34 months remaining and pays £514 per month)

loan 2: £4,577 (12 months remaining and pays £351 per month). 

I also have a HSBC Advance current bank  which I transfer £100 monthly for daily purchases but my salary doesn’t go through HSBC.  The current account has £1.5K overdraft which has never been used. 

I understand they can offset if there is any money in my current account but If I were to default on the two loans, will HSBC automatically close my Advance current account too? 

Grumpelstiltskin

Do it yourself, close our HSBC account and go to a different bank.

Don't give them the chance to snatch your money.

sourcrates

You can never be 100% certain what a bank will do, best advice is not to bank where you have debts, then it ceases to be an issue.

Mr.Generous

Grumpelstiltskin said:

Do it yourself, close our HSBC account and go to a different bank.

Don't give them the chance to snatch your money.

Interesting perspective when you have their money and are breaking the agreement, but I have to say I'd do it too. Never save with bank you borrow from, or even the same banking group. Wise precauition.

PanAction25

Thank @sourcrates and @Grumpelstiltskin for your comments.  I have already missed first payment of some credit cards with the view to defaulting. But I haven’t missed payments for the loan yet as I’m concerned that HSBC may take legal action given the significant amount of the loans combined. I’ve read elsewhere on this forum that I can’t give preference to one creditor over the other so it is better to include all debt in the DMP.  

Grumpelstiltskin

You must include all unsecured debts in a DMP, get that account closed ASAP.

Forget legal action at the moment, if it happens it will be way down the line and you will know about it in advance, so a chance to do something about it at the time.

PanAction25

Thank you @Grumpelstiltskin

sourcrates

Banks don`t usually take legal action, that`s why we have debt collection companies.

Bad debts are either assigned or sold, and left to debt collectors/debt purchasing companies to chase up.

They can get legal if ignored for too long and they think you can pay, but once arrangements are in place its fine.

Your 20 odd k of loans is small fry to HSBC, they would simply sell it for around 12p in the £ and write the rest off to tax.

PanAction25

I have closed our joint HSBC account which had around £2.5K.  We have joint Mortgage so I understand we are linked financial associates. 

Can I open a new joint bank account and deposit the money in there?  Will her credit record be protected although we have a joint mortgage?

ManyWays

No, her credit record will be harmed because of any joint accounts so don't open a new one.