Thread: won full amount then recieved debt letter

If the bank tells you to repay the overdraft in full, don't panic.

Work out how much you can repay per week/month without leaving you in financial dire straits. Write to the bank telling them that you can not possibly repay the o/d in one go, and that you will pay back £xx per wk/mth/4 wks/whatever until o/d is cleared. Enclose 1st payment in letter. If they cash the cheque, it will be all the harder for them, in the case of future argument, to explain why, if they didn't accept the agreement, they cashed the cheque. You need to say in your letter that this is the best you can do, and if they are not happy with it, they can and should take you to court and ask a judge to decide what and how much you should repay. Oh, and demand that they freeze interest onto the debt until it is paid off. (they probably won't, but it is aways worth a try)

Here's the news: The bank doesn't want to go to court on that either, for the following reasons:

a) Like the rest of us, they have a duty to mediate outside the court sytem. If you have made a reasonable offer, a judge will not take kindly to them litigating.

b) Depending on what you offered to repay and what your existing debts are, a judge could well decide to award them LESS than what you have offered to repay in the first instance. Because a bank o/d is not a "necessary" debt, it is at the bottom of expenditure, and before a judge decides how much you should repay the bank, he'll look at all your other outgoings, mortgage, food, electricity and so on... Then, on a sliding scale of importance, until it gets to the overdraft... And since you had made an offer of repayment as it is, and kept to it, he is not going to put the bank very high in the order of priority. And the bank knows this.

The 3 important things to remember are these: Enclose 1st payment with your proposal. Keep up the payments. Don't budge once you have made your proposal, no matter what they say.

I should add that the above is my standard reply to people in your position. However, in your case, because you have just won back an amount near equal to your debt, it could be argued that you should have made an attempt to repay part of your debt with that money, and I don't know that a judge wouldn't think the same, should it ever get to court (not terribly likely, I grant you).

If you haven't spent all the money regained from Natwest, why don't you use as much as you can to pay off part of the o/draft and negotiate for the rest as above? It would be the sensible and financially healthiest thing to do, and one or 2 less debts to worry about in the long run. ;-)

Are the account still overdrawn then?

If they are, then you will have to settle them. It seems as though the amount they owed you in charges was similar to the amount you owed them (if so) and perhaps would normally have been paid back into the account first. Was this account closed?

Start by paying back the amount you were originally overdrawn by. Any charges incurred since your claim began can then be dealt with.

Start a new claim - use the same procedures - and once they have paid up, make sure it goes back into the account to cover this purported debt....

Also write to them and state very clearly that the amount is formally disputed and you are about to instigate a request for the this matter to be withdrawn and this may also involve litigation.

IF they mention a default - or you actually receive a default notice, let us know.