Repayment Plan for Overdraft

CoolIce

I have held a Santander account with an arranged overdraft for 25 years.  I now live with my daughter on a reduced state pension.  Since my husband died the overdraft has crept up to £1300 and now the bank want me to repay it.  I have offered them £25.00 a month (the amount I was paying in interest each month).  The first person I spoke to agreed this amount and said to ignore future letters as I was in an agreement.  He did not say anything about interest.  He told me to move my banking to another account and stop using the account, then call back, which I did.  The next person I spoke to didn't acknowledge the arrangement and said I had to complete a Budget Plan and call back.  I rang again to confirm with someone else if I did have an arrangement and they confirmed it.  I called after sending the Budget Plan and this time I was told if I had an informal arrangement they would charge me interest.  If they do that the monthly interest would cancel out the monthly payment. Every time I call I get told something different. I left the call saying I would write a Complaint Letter as I have no confidence in the people I am speaking to.  Does anyone here have any advice please.

Grumpelstiltskin

Your first mistake was to phone these people, never do that.

Communicate by writing either letter or E Mail.

Write  a letter telling them how much you are able to pay ( if you can make it just above the interest amount ) and pay them that amount by standing order each month. Did you ever speak to their Bereavement Department at any time?

Also ask if they can suspend or reduce the amount of interest because of your circumstances.

RAS

Hoping this is NOT your main account into which your pension is paid? If so, get a new one with a group that is not linked to the same banking group immediately and transfer all your payments in to the new account. You can set up Monzo or Starling on-line.

Do not use switch, transfer any essential DDs "manually", meaning contact the supplier directly with the new account number. 

ManyWays

Can I ask how long ago your husband died?
And also check whether you are getting Pension Credit?

CoolIce

Thank you all for your advice.  I really didn't want to phone them, but I couldn't send a secure message and unbelievably they do not have an email address.  I initially sent them a letter about my circumstances and they replied with a non personal standard letter to contact a debt charity.  The first person I spoke to on the phone was very understanding and led me to believe I had set up an arrangement with them, so I am very confused by the contradictory advice I had received since.  The £25.00 offer is the absolute limit I can afford.  My pension is paid into another bank account and I have transferred all my direct debits into the new account.  My husband died 6 years ago and I do not qualify for pension credit.

RAS

Thanks. You need to think about the long game here and decide how you want to play it. Do you have any emergency fund?

First, can you get your credit records. You can get Transunion through the MSE Money Club link, Clearscore for Equifax and then a free trial of Experian, cancel once you've got the report.

One of those will tell you how Santander are reporting your OD and if there are any other gremlins. AP markers affect your credit record for much longer than defaults. Those just fall off your credit record after 6 years. 

In common with most people on debt management plans you need to think about which is better. You also need to think about whether to continue paying or to ask for a write off.

Generally, if you intend to make payments, it is better to let the account default first because that halts interest and fees.

So stop paying, put that £25 into a savings account and wait. You need those savings. At some point the bank will write demanding that you repay the entire sum or they will terminate the relationship. That's what you want.

Once the default is registered in your credit record, you can start paying off the principal knowing that every pound reduces the debt. But you need to wait to find out if they've sold the debt or are ging to handle in house or assign to a debt collector. Then pay a tenner a month and put £15 into your emergency fund.

Longer term you may be offered a discounted settlement, or ask them to write off the debt.

 

CoolIce

Many thanks for your advice, I do not want my payments swallowed up in interest. I am not bothered about my credit score as I do not intend to take out any credit.  I do have some very old debts which I am making very small token payments on, including a Santander credit card, which I have told them.  I also said I shouldn't be making a payment of £25,00 to them which is a lot more than the other creditors.  As I understand it they should all be treated the same.  It's such a pain they are making the situation complicated.