lloyds tsb -their own internal collections dept?

[joko]

Hi, I have been asked to pay back my overdraft in 3 weeks - i can't, and neither can i afford the weekly amount they suggested coupled with the interest - and when i discussed this with the bank, i was advised to ignore the letter and let the account pass over to collections and they would let me pay it back at a lower level so they will also need to see my in goings and outgoings and work out and payment schedule, and also there would be no more interest.

i can't help thinking there must be some downside to this? she seemed to think it was a good idea but didn't mention one.

i think she said they have their own internal collections dept - so does this mean it will not affect my credit rating?

what are the negatives of this, if any?

many thanks

also posted in B&F

[NORMANTHEDOG]

it will only affect your credit rating if they put a default notice on you,and they shouldent do that if you agree to pay it off

[rugeleyboy]

i may be wrong but.................

banks dont actually give you CCJ's as they are a law amongst themselves they mark your credit history and this tells all other money people that you have had a problem?

i would speak to another person,

my bank manager tried to talk me into a loan to repay my overdraft for my business but told me it would be cheaper if i kept the overdraft????? and he is from Lloyds TSB!!

[seatrout]

The bank clearly wanted to pass this debt to their collections department but had to give you the opportunity to clear it first.

I would imagine that the bank will pass on details to credit reference agencies. Lets face it if I was about to lend you money I would want to know about any overdrafts etc and whether you had paid them off

I dont think you are in a position to worry about the negative affects - clearing the overdraft as soon as you can will do your credit status no harm

[hairygrape]

I think I may be able to give you some specific knowledge about this as I've got some experience of LloydsTsb.

Firstly, their "Collections Department" has been a separate division of the bank for a number of years. They are called BLS Collections Ltd and are a wholly owned subsidiary of the bank. BLS Collections are based near Oxford.

Don't be fooled by the paperwork you receive from BLS as they have a policy of trying to make the documentation look like its from an independant debt collection agency. The reason for this is that they are anxious to show a degree of sympathy towards the debtor and portray themselves as only carrying out somone else's instructions. Nothing could be further from the truth.

The first thing BLS Collections do following a referral is to notify Experian, Equifax and another credit reference agency of what they regard as an unpaid debt. Make no mistake, this is their policy and every one of their "clients" gets a bad credit rating instantly as a result. There are no exceptions and it makes no difference if you owed a million pounds or a few quid on an overdraft. BLS will not consider any reasons why the debt arose and people who are unable to pay through no fault of their own to those that are foolish with money, are all treated as debtors and their credit reference is "adjusted" to show as much.

On the up side, you are entitled to obtain a copy of your file from these agencies for a nominal fee. You could this say, 12 months from the start of the repayment scheme. This way, you could check exactly what reasons for the default have been entered on your file on behalf of the bank. If it's wrong, apply for a notice of correction.

[hairygrape]

Oops, the second sentence of the last paragraph should read:

"You could do this say, 12 months from the start of the repayment scheme"

The notice of correction is an official note inserted in your file stating why you consider the content of the report as incorrect. The idea is that future lenders take this amendment into consideration when they consider if they'll provide credit.

The sceptical would say that once you've got a bad credit rating, you're chances of obtaining credit are virtually nil anyway no matter what's in the note.