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Overdraft debt- 17 years to pay off!!
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PennyRose
Posts: 1 Newbie
Hi,
I have a joint account with my recently made ex-husband. It has £1k overdraft on it which is my responsibility to pay off (we have divided our debts equally but the account has to stay as an open joint account until I can pay off the overdraft and close it). I currently work part time and bring in just over £1k per month. I don’t have any children. I don’t receive any government help because my earnings are £15k per year which is over their threshold for things like tax credits.
I had previously worked full time and with loosing another full time wage in the house things have rapidly gone downhill financially for me. I am not able to take out other loads/credit cards so I have contacted my banks who have all been great and I am on low payment plans with them for 1 loan and 2 c/cards.
The problem is with my overdraft. I am getting charged around £15 per month in fees and interest. I can probably afford to pay £20 per month to start getting this paid off but with those charges I am only paying £5 per month – at that rate I am looking at 17 years to pay this off!
(my ex-husband is also giving me grief about this account still being open so I am eager to get this paid and closed so I don’t have to hear from him!!)
I have contacted my bank and explained the situation. I have also said how great they have been regarding my other debts and whether I could do a similar thing whereby they stop the charges/interest and allow me to just make monthly payments to pay it off. They have said no. They have said that although this can be done with loans and credit cards it isn’t something they can do with the overdraft!!
I don’t know what to do now? I was thinking of writing to them to see if that helps but I’m not 100% sure what else I can add to help my case? They already know my situation; they have already done an affordability check for my other debts. I have been very open with them about it all. My plan is to get a full time job again so that I can more income I can put towards the debt.
Does anyone else have experience of this? Could anyone think of something I could write to strengthen my case?
All help appreciated!
Thank you.
PennyRose
I have a joint account with my recently made ex-husband. It has £1k overdraft on it which is my responsibility to pay off (we have divided our debts equally but the account has to stay as an open joint account until I can pay off the overdraft and close it). I currently work part time and bring in just over £1k per month. I don’t have any children. I don’t receive any government help because my earnings are £15k per year which is over their threshold for things like tax credits.
I had previously worked full time and with loosing another full time wage in the house things have rapidly gone downhill financially for me. I am not able to take out other loads/credit cards so I have contacted my banks who have all been great and I am on low payment plans with them for 1 loan and 2 c/cards.
The problem is with my overdraft. I am getting charged around £15 per month in fees and interest. I can probably afford to pay £20 per month to start getting this paid off but with those charges I am only paying £5 per month – at that rate I am looking at 17 years to pay this off!
(my ex-husband is also giving me grief about this account still being open so I am eager to get this paid and closed so I don’t have to hear from him!!)
I have contacted my bank and explained the situation. I have also said how great they have been regarding my other debts and whether I could do a similar thing whereby they stop the charges/interest and allow me to just make monthly payments to pay it off. They have said no. They have said that although this can be done with loans and credit cards it isn’t something they can do with the overdraft!!
I don’t know what to do now? I was thinking of writing to them to see if that helps but I’m not 100% sure what else I can add to help my case? They already know my situation; they have already done an affordability check for my other debts. I have been very open with them about it all. My plan is to get a full time job again so that I can more income I can put towards the debt.
Does anyone else have experience of this? Could anyone think of something I could write to strengthen my case?
All help appreciated!
Thank you.
PennyRose
0
Comments
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The first and most obvious thing is to look at increasing your income wherever you can - even things like the survey sites might help to bring in a bit extra, and in your situation every little helps.
I'm wondering whether you might have a financial hardship angle to getting them to freeze the charges - investigate Martin's guides over on the main site to see if there is anything in there, if you haven't already.
Can you actually cover your outgoings on an annual basis (by which I mean including everything you spend in a year - so insurances etc that are renewed and paid annually as well as the routine monthly stuff) on the income you're on?
On the job front - something worth trying is to identify companies locally in the field you want to work in, that you would want to work for, and approaching them directly with a short, immaculately presented, and concise CV, to enquire about any vacancies they might have.
I suspect it would also be worth you putting together your SOA (Statement of affairs - link is in the "sticky" post at the top of the board) to see if there is anywhere you could make savings that you've not thought of. If you post it into this thread we'll be happy to take a look and see if we can help identify anything.🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
£100k barrier broken 1/4/25SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her0 -
Simply stop paying money into the account, eventually they will close it.
The debt will end up with a debt collector, before been sold.
Wait till it's sold, use the time to save up some money, use the money to offer a full and final settlement of the debt.
If banks won't help, help yourself.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
I would treat it as a separate debt rather than your main account particularly if you have split with your husband and he is named on it. Open another account for your wages and resolve to put a certain amount in each month to cover the fees and a bit more. Even overpaying by a few £ each month with surveys or mystery shopping will bring the date forward for it to be cleared. When you have a full time job increase the monthly payment.
Why did you get the overdraft? That is one of the most expensive ways of borrowing. If your ex moans point this out that you are paying £15 a month for it. Is it a fee paying account? That is 18% interest per annum.
Alternatively do as sourcrates suggests and default on it. They may then reconsider with not reducing it.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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Hi PennyRose
It sounds like you’ve done well negotiating with your creditors but the overdraft is a sticking point. The first thing I would say is make sure you are no longer using the account. If you have any money paid into the account it is going to be swallowed up by the interest and charges, which is not affordable for you at the moment. Get yourself a basic bank account with any bank you do not already have debt with, and use that instead.
Next ask the bank to freeze the account. They won’t close it due to the overdraft, but they can at least freeze it so nothing goes in or out. Legally both you and your ex partner are liable for the overdraft as it is in joint names, so it is fair on both of you that the debt cannot be run up further.
The overdraft is no different to a credit card or loan in that the bank does have the discretion to freeze the interest and charges. The best thing to do is complete a SOA http://www.stoozing.com/calculator/soa.php , work out what you can afford to offer and send it to the bank with a request to freeze interest and charges.
Bear in mind there may be other ways to deal with your overall debt situation and you can seek advice on those from one of the free debt advice agencies.
Susie
@natdebtlineWe work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps0
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