Debt and Bank Accounts

dormy · 27 May 2015 at 12:30AM

Not sure if this is the right place to post this but I thought I would start here as the problem's basis is to do with debt.

My daughter-in-law has got herself into a mess with debt and a while ago set up an account with Gregory Pennington to manage it. Apparently they recommended Think Bank to help her control her money better. I've looked at the account and can understand how it could help her if she used it properly - but she doesn't and ends up with bills not paid. They also charge (I think it's £15 a month) for running the account.

My son knew about some of the debts but he was pretty shocked when I showed him (with her permission) all her finance stuff. Last week I ended up having to loan them £200 for car insurance etc and I'm a bit fed up being Bank of Mum. They have now put their finances in my hands and hopefully, if they stick to the plan I've tried to sort out, between them they can negotiate some settlement figures and pay off some of her 24 individual debts!

My question is really to do with moving her bank account. Are there any banks that do a basic account with a debit card but where you cannot go overdrawn at all?

Thanks for your help.

HappyMJ · 27 May 2015 at 12:55AM

Yes there are but the banks don't like giving them out as they aren't profitable for them. You also need to know what you're asking for. They may still charge a fee for not having enough money in the account when a direct debit is due. I'd cancel all the direct debits and pay as many bills by cash if possible to avoid that. Some bills such as gas/electricity will cost more though but the fees charged may exceed the savings made anyway.

ellesbellesxxx · 27 May 2015 at 7:18AM

Gregory Pennington charge for dmps don't they? Is it worth talking to Stepchange or pay plan?

sourcrates · 27 May 2015 at 7:25AM

First off dump Gregory Pennington, they are a fee taking debt management company, who could go bust at any time, as many have, taking all your money with them, leaving you in a much worse mess than you are in now.

For a basic bank account, coop do a good one called "cash minder", you get a debt card, not a cash card, you can open online, but must take ID into a branch.
Most banks do them, but they are not advertised, you need to look down the list of accounts a bank offers to find them.

dormy · 27 May 2015 at 8:53AM

I've only just got in to all this with her so the first step is to sort out a free bank account. I'd never heard of Gregory Pennington until she told me and I didn't realise they charged a fee as well. I'll sort the bank and then look at them.

Thanks for your help

greensalad · 27 May 2015 at 9:30AM

You could also consider a mastercard/pre-paid card. There are some that let you do direct debits I think.

Seeing as you're now managing her finances, why not keep the current account and transfer her "pocket money" onto a pre-paid card on a weekly basis? You can discuss a monthly budget of how much she has to spend on "fun stuff" and transfer it over on weekly to ensure she doesn't run out by the end of the month. You can divide up the weekly amount differently, for example if she's going to a party she might need more that week than a weekend spent at home.

National_Debtline · 27 May 2015 at 11:03AM

You might find this MSE article on basic bank accounts useful:

www.moneysavingexpert.com/banking/basic-bank-accounts

James
@natdebtline

[Deleted User] · 27 May 2015 at 12:26PM

Go easy on your daughter in law; some of the fault probably lies with your son also. Don't play the blame game, they're married so 'for better or worse'

dormy · 27 May 2015 at 6:17PM

Hi "Deleted User" - I've not laid blame anywhere as I am not in their shoes, and I've also tried not to be judgemental at all. My son is definitely not perfect as he has not really tried to help her sort things out, but he genuinely didn't know about most of these debts as she has been very secretive. I'm hoping with a bit of guidance she will see the benefit in being debt free. This week alone she has managed to not spend £50 and I think that is something to be proud of.

Her debt is not massive, it's still a substantial amount of around £9k though but there are a lot of debts around the £300 mark. At the moment they are being paid nominal amounts by Gregory Pennington so I'm hoping they will negotiate a reduction if we offer at least half. Onwards and upwards!

Ilona · 27 May 2015 at 6:35PM

Hi dormy. As sourcrates said, dump Gregory Pennington, your D I L doesn't need to pay them to sort out her debts. She could go down the route of self managed, or if she is not confident to do that there are charities out there who will help for nothing. Contact Stepchange or Christians Against Poverty. Do not pay G P another penny.
Ilona

Westie983 · 27 May 2015 at 8:16PM

I would agree with the others to get rid of Gregory Pennington, a friend of mine was with them, and when I found out me moved her to step change for the same help and support but without the fee they were taking from the monthly payment.

Then you will need to look at basic accounts, that dont have a overdraft but be careful as some of them won't have a overdraft facility but that doesnt mean you cant go overdrawn!!!

where I work you can have a "control" account which means you cant go overdrawn and any standing orders or Direct Debits that would put you into a overdraft are failed, or returned unpaid.

There is a fee of £10 a month for this account but the fee may well be cheaper then some of the cards that charge more for not having a overdraft and going overdrawn, or not being able to budget the money if the money goes out regardless....

first things first get your sister in law onto step change and then go from there...

:-)

Debt and Bank Accounts

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