3k Overdraft, Halifax Going To CLose Account If I Cant Clear It Before 30 Days.

[mystic_bertie]

Hi Guys

 

I have found myself in new financial difficulties because of my job loss due to covid in April. I have been forced to use most of my 3k overdraft for the last 6 months and obviously incurring a lot of interest charges along the way. 

 

I called Halifax last week to see if they could offer help in some way. They spent a while asking about all my incomings and outgoings and they can see i dont have any spare money to pay towards my overdraft. They said they would freeze the interest for 1 month but i need to call them back before then. They want me to have some sort intentions to pay off or pay towards my overdraft but if i dont they are suggesting closing my account and passing it to a collection agency.

 

Someone owes me a lot of money but i might not see that for a long long time. At the moment what can i do with my bank account. Is it worth trying to find a way to borrow 3k to clear the overdraft or should i let them close it. Is it worth taking out a credit card or something to move the debt?

[BankFodder]

Whatever you do, you should get yourself another bank account immediately. If possible get a couple. Parachute accounts are extremely important to have.

You can try getting online accounts but you will be best off if you can get conventional accounts in, say, nationwide, Metro – something like that.

Make this a priority. (I'm assuming that you don't have a parachute account already although you have been here so long, you should know that this is important).

Some of the other site team members will be along soon I'm sure to advise you on your specific 3K problem

[mystic_bertie]

Bankfodder many thanks for your reply. I have had a Clydesdale account for many years now, its a basic account so i might need to ask them to change it to a current account. I will apply for another bank account like you suggested.

[AndyOrch]

BF is correct.....get that sorted quick....move your DDs and payment arrangements and isolate the Halifax account...let them close it...actually insist they close it to stop any further charges or interest accruing.

 

If your really lucky they will swiftly sell it to a DCA...but be prepared for the onslaught and the inevitable default they will place on your credit files.

 

Andy

[BankFodder]

Open another parachute account – and another. Get it all done quickly before Halifax start to blight your credit file.  Also, upgrade the basic account to a full account now – once again before your credit file gets smashed up. Don't hang around

[fkofilee]

Agree with Bankfodder - I also think Monzo and Starling could be for you.

Full Banking Licenses and the accounts are full bank accounts from the get go. 

 

You can set one up in less than half hour if all ID Checks go through straight away. Card out in the post in less than 3 days. 

Also covered under the FSCS  Upto £85000 with each

 

I use both and ditched Barclays / Nationwide Combo because I dont rate them at all for poor CS.

[mystic_bertie]

On 07/10/2020 at 13:25, Andyorch said:

BF is correct.....get that sorted quick....move your DDs and payment arrangements and isolate the Halifax account...let them close it...actually insist they close it to stop any further charges or interest accruing.

 

If your really lucky they will swiftly sell it to a DCA...but be prepared for the onslaught and the inevitable default they will place on your credit files.

 

Andy

 

ANdy many thanks for your reply. I have done what BF suggested and opened a new account with TSB but they would only allow me to open a basic current account.

 

How do i avoid getting a default. I went through all that many years ago and my credit file is not good. I dont want to do that again. Is there a way to deal with the 3k debt and avoid a default.

 

On 07/10/2020 at 14:32, BankFodder said:

Open another parachute account – and another. Get it all done quickly before Halifax start to blight your credit file.  Also, upgrade the basic account to a full account now – once again before your credit file gets smashed up. Don't hang around

 

BF many thanks for your reply. I did as you said and opened a TSB account but it would only allow me to open a basic current account. Ill get the other account upgraded too.

 

20 hours ago, fkofilee said:

Agree with Bankfodder - I also think Monzo and Starling could be for you.

Full Banking Licenses and the accounts are full bank accounts from the get go. 

 

You can set one up in less than half hour if all ID Checks go through straight away. Card out in the post in less than 3 days. 

Also covered under the FSCS  Upto £85000 with each

 

I use both and ditched Barclays / Nationwide Combo because I dont rate them at all for poor CS.

 

Hi thanks for your reply I opened a TSB account today because BF suggested getting a regular account over an online only bank. Im going to get my Clydesdale account upgraded too.

 

 

[BankFodder]

Yes, but get another account or even two more.

[fkofilee]

Well then get TSB and then a Monzo / Starling

An online bank like Monzo / Starling is REALLY GOOD as a back up.

[AndyOrch]

Quote

How do i avoid getting a default. I went through all that many years ago and my credit file is not good. I dont want to do that again. Is there a way to deal with the 3k debt and avoid a default.

 

It depends on how fast the bank decide to register a default...once you cease to service the account (IE Stop deposits) it may take many months for them to issue a Notice served under Sections 76(1) and 98(1) of the CCA1974 (Current Account Default Notice).

 

Even if you agreed a monthly payment they may still as they should register a default...any payment arrangements in my view simply stops the debt from becoming Statute Barred so think carefully before agreeing any payment arrangement..it wont save you from being defaulted.

 

The bottom line is the facility has broken down and you will default.....therefore unless you can settle the debt within 30 days as they request I really cant see you avoiding the default marker.

 

Andy

[mystic_bertie]

20 hours ago, BankFodder said:

Yes, but get another account or even two more.

 

Ok many thanks ill get 2 more as you suggested.

 

19 hours ago, fkofilee said:

Well then get TSB and then a Monzo / Starling

An online bank like Monzo / Starling is REALLY GOOD as a back up.

 

Many thanks ill do that then as i need another addition account as BF suggests.

 

16 hours ago, Andyorch said:

 

It depends on how fast the bank decide to register a default...once you cease to service the account (IE Stop deposits) it may take many months for them to issue a Notice served under Sections 76(1) and 98(1) of the CCA1974 (Current Account Default Notice).

 

Even if you agreed a monthly payment they may still as they should register a default...any payment arrangements in my view simply stops the debt from becoming Statute Barred so think carefully before agreeing any payment arrangement..it wont save you from being defaulted.

 

The bottom line is the facility has broken down and you will default.....therefore unless you can settle the debt within 30 days as they request I really cant see you avoiding the default marker.

 

Andy

 

Many thanks for your reply. What is peeving me off is i did not ask them to close this account, i called them to see if they could help me because of my difficult situation. If i knew this would happen i would not have called them and just took the hit on the interest charges. Im planning on selling my car soon as its maybe worth 6k but i cant be sure how quickly ill sell it. 

 

Is it worth trying to get a credit card to transfer the debt and avoid getting a default. That way im not getting more debt but just moving it.

 

[AndyOrch]

Never a good idea to borrow to clear debt...the problem with overdrafts is that they can recall them at any time for any reason...you are basically living on borrowed time.As stated you do not know how long if at all they ever place a default marker...it may be 6 months or longer or shorter.

 

The point is that you are not in a position to stump up within 30 days the amount requested...nor is it fair of a National Bank to request this....but thats Banks for you.

 

From your initial first post and the last conversation you had with them it seems they have agreed to an interest freeze of 1 month but its very much open ended given they ask you contact them before then....not sure what thet means or whether you really do need to call them.

 

Take the 1 month freeze.....get your alternative banking in place.....stop all deposits to the Halifax...they will pick up on this possibly after 2/3/ months of no deposits.....but by this time you may be in a position to clear the debt.....but only if they have not defaulted you.....if they do then run the clock down on the debt.....as its mostly interest and possibly unfair charges making up the majority of this debt.

 

Andy

[mystic_bertie]

Thanks for your reply. 

 

With regards to borrowing to clear the debt. At the end of the day the debt amount would be the same.  I just want to avoid a default.

 

If they do take months before the default is applied, would clearing the debt before this happened prevent a default?

 

When i call them back up i could ask them to give me more time if i intend to sell my car which could be worth 6k.

 

They said i need to call them they were quite insistent about that.

 

The charges on the account are only interest at this point but i dont know if i will be hit with unfair fees at a later date. I have opened 1 account so im going to open a Monzo account as well tomorrow.

[mystic_bertie]

On 09/10/2020 at 14:52, Andyorch said:

Never a good idea to borrow to clear debt...the problem with overdrafts is that they can recall them at any time for any reason...you are basically living on borrowed time.As stated you do not know how long if at all they ever place a default marker...it may be 6 months or longer or shorter.

 

The point is that you are not in a position to stump up within 30 days the amount requested...nor is it fair of a National Bank to request this....but thats Banks for you.

 

From your initial first post and the last conversation you had with them it seems they have agreed to an interest freeze of 1 month but its very much open ended given they ask you contact them before then....not sure what thet means or whether you really do need to call them.

 

Take the 1 month freeze.....get your alternative banking in place.....stop all deposits to the Halifax...they will pick up on this possibly after 2/3/ months of no deposits.....but by this time you may be in a position to clear the debt.....but only if they have not defaulted you.....if they do then run the clock down on the debt.....as its mostly interest and possibly unfair charges making up the majority of this debt.

 

Andy

Thanks for your reply. 

 

With regards to borrowing to clear the debt. At the end of the day the debt amount would be the same.  I just want to avoid a default.

 

If they do take months before the default is applied, would clearing the debt before this happened prevent a default?

 

When i call them back up i could ask them to give me more time if i intend to sell my car which could be worth 6k.

 

They said i need to call them they were quite insistent about that.

 

The charges on the account are only interest at this point but i dont know if i will be hit with unfair fees at a later date. I have opened 1 account so im going to open a Monzo account as well tomorrow.

 

[AndyOrch]

Quote

If they do take months before the default is applied, would clearing the debt before this happened prevent a default?

 

 

Well yes....but you dont really know when they may apply it.

[mystic_bertie]

On 12/10/2020 at 19:21, Andyorch said:

 

Well yes....but you dont really know when they may apply it.

 

Thanks again for your reply, it did not occur to me that they dont notify you so it a bit of a risk. Thats for clearing that up mate.

[AndyOrch]

Well they should by law notify you by way of Notice served under Sections 76(1) and 98(1) of the CCA1974 (Current Account Default Notice).

which will allow 28 days to settle the debt.

 

What I'm saying is that you don't know when they will default...not if.

[mystic_bertie]

2 hours ago, Andyorch said:

Well they should by law notify you by way of Notice served under Sections 76(1) and 98(1) of the CCA1974 (Current Account Default Notice).

which will allow 28 days to settle the debt.

 

What I'm saying is that you don't know when they will default...not if.

Many thanks for your reply. I understand better now. I will try and avoid this happening but if it does i will hopefully have time to do something about it if i can. 

[mystic_bertie]

Just a quick update. I managed to convince Halifax to keep my account going for another 3 months and they will freeze the charges for this period. I told them i am receiving housing benefit of 495 pounds each month and i will let the accumulate in my account. So im quite confident i can clear my overdraft in that time.

 

Many thanks for everyone's help so far ;)