Can the bank take all of your money out of your account?

[Chickengeorge]

5 years ago i took out a loan and was paying the bank back, unfortunately I lost my job and then had to ask the bank to make the loan repayments to the minimum the loan agreement came to an end with me owing more than my original loan and the loan payments have now been given to a debt recovery company. Recently I have had a new job and intend to carry on making my payments and upping them once i have cleared my immediate bills etc... I can remember the bank telling me that they were going to close my account a little while ago, did they mean passing it over to the debt recovery people or are they likely to shut down my account, also now Im in employment could they suddenly just take everything that I have saved because technically it's there money? This has left me a little worried, can anyone shed some light on this for me please.

[mike11111]

Although no expert, if the the repayments have been passed to a debt recovery company then it is no longer the bank's business, as they have sold off the debt. They may close your account, that is the bank's privilege, but they can't pass any money over to the Debt recovery agency.

[katekoala]

if they have passed the loan to a debt recovery agent, they will now 'own' the debt, so any repayment plans will be done through them.

No lender can do 'an attachement of earnings' (take from your account) unless agreed in a court of law.

I would also add - that 'agents' buy the debt for a lot less than is owed i.e they may buy a debt of £10k for £5k; therefore they will just be happy you make any sort of repayments as in theory they might potentially double their money!

but all in all - your old bank cannot touch your current money :)

[Chickengeorge]

Thanks for your quick answers. Ok so now the debt is just between me and the debt recovery company and the bank has no say in this? Will the debt recovery company be told by the bank that I have now started earning again or is that information just between me and the bank? Surely if the bank sees you earning again and then realizes that maybe they acted in haste they may try to get the loan back from the debt recovery agency?

[mike11111]

No chance of that. They would have to buy it back at more than they sold it for.

[Chickengeorge]

Ok thanks for your answers and the peace of mind, have a great weekend.

[katekoala]

they could only buy it back if it was sold in error - and if the new purchasers agreed to it... and they never would as they bought it for much less and will hopefully get or be getting payments.

rest easy :)

[mike11111]

I think that the moral here is never borrow from the people you bank with, unless you are so financially secure that you can guarantee meeting all the repayments on time. There was a vey sad case reported a couple of years ago in which a young man had exceeded his overdraft limit. The bank cancelled the overdraft, so that when his next salary was paid in they took it and left him without a penny to live on for a whole month. He committed suicide as a result.

[katekoala]

really - well thats rather extreme?! what they did is quite common (happend to me before had a loan with bank account, couldnt pay loan so kept taking out of my current account/overdraft until nothing left) but I complained, got financial help, and all was rectified. I guess maybe not as easily done in a month etc - but i still think rather extreme way to deal with it.... perhaps had other issues and financial stress :(