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Overdraft collection.

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I have an overdraft with Abbey National for £2,500 and after excessive charges they brough to my account and the time taken to resolve them, I changed bank.


Naturally Abbey decided I no longer qualify for such an overdraft and re-set my limit to £0. I am not in a very good position to pay this back and I still tried to phone them to come to an arrangement where I could pay something back every month and I was told no, and that I'd be better off waiting for them to issue a default notice on the account and forward the case to a debt collector.


Can they legaly do this even tho I have tried to sort it directly with them?

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Yes, unfortunately, overdrafts are 'repayable on demand' and the OFT guidelines (http://www.consumeractiongroup.co.uk/forum/debt-bailiffs-advice/55579-oft-guidelines-debt-collection.html) are designed to cover accounts after default so they don't have to accept payments over time yet. Why they won't though is beyond me, a debt collection agency will take a cut of the original debt from abbey for their 'services' so from a business point of view they stand to lose out. I'm guessing whoever you spoke to just isn't capable or willing to accomodate you.


Your obviously want to avoid a default notice so you could try writing to them (don't phone again) and offer a repayments as you can afford. If this fails perhaps you can arrange an replacement overdraft with your new bank to cover it, a bit like a balance transfer on a credit card. You'd be best to try this sooner rather than later as getting sufficient credit after a default has been registered will be considerably more difficult.


Be wary of abbey adding charges to the current balance now that they've removed the overdraft, if you act quickly enough it may save you having to go through the process of reclaiming them again.


Good luck :)

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