Overdraft recalled by bank

DJP_2

A friend of mine tells me his bank has told him he has to pay back the £2000 he is overdrawn by the end of the month and they are taking the overdraft facility away from him.
He has been in to see them to tell them he simply cannot find that money in that time , but they insist they want it paying.
He is worried what will happen next , my guess is if the bank took him to court , then the court would tell him he has to pay it back in installments.

Anyone shed any light on this ??

Many thanks for any advice.

poorandindenial

just bumping you back up

Head_done_in

Whether they do remove it or not i think legally they can. T&Cs of an overdraft state it can be removed at any time. They wouldnt take him to court for it to be decided - if he doesnt agree something with them and they remove it any money going into the account will just pay off part of the debt and he wont have a credit balance until £2000 paid in!

If he cant sort something with the bank then probably best he gets wages paid into another account or he will just lose them.

If no money is paid into the account, then the bank will probably take him to court then and they will sort out installments. The banks know this though so they will try to keep it out of court and will arrange installments before that point but possibly not until after they have removed the overdraft.

It would be worth him trying the bank again and asking if they will remove it gradually

Squirrel29

Can he open up a back up account with another bank, get his salary paid into it and transfer direct debits to it. At least he won't be having payments bouncing left right and centre and adding to charges. He can then pay the overdraft off monthly? Another option is to request the bank reduce the overdraft monthly by a manageable amount i.e £50 or £100 until it is paid off?

mitty_2

If I were him I would open a basic bank account elsewhere and have his wages paid into that one - as the bank may well use his wages to repay the overdraft.

DJP_2

Many thanks

Bailey73

A certain Building society done the same to me....

..I Have had an overdraft with them for about 6yrs when out of the blue a letter came asking for it to be repaid. Luckily for me they accepted instalments.

I would just like to add that their letter came just after I sent them a letter trying to reclaim my bank charges.

fatbelly

Court action would be unusual. They will however issue a default notice and your friend's credit rating will suffer. He should then be able to negotiate repayment terms with the bank's collection department

bobbie78

The same thing happened to me about 18 months after I graduated the bank said I had 14 days to find 2 grand, then they said the only way out was to convert it to a graduate loan, and I stuck some other things in like credit cards - seemed a good idea at the time. 7 years later after they extended my overdraft again then wrapped it into the loan again which increased the term I have one payment left till I am free of the thing and I dread to think how much it has actually cost me in interest etc. Just don't take out more credit to pay it back unless you know you will really clear it. Depending on what other debt you have you might be able to get an interest free credit card for a year and pay it back that way, but I'd only do that if you know you are disciplined enough to pay it back before the rates go up - I'm not I have discovered so I won't be doing that again.