question on joint account

[Kristal53]

My daugher and husband have a joint account which is substantially into an agreed overdraft which, due to a temporary job loss, they are struggling to clear it. What could happen if they get to their limit and can't pay anything off? Will the account be closed by the bank and legal action taken to recover the amount? and if so could the Bank send in Bailiffs ? They currently owe 2500 pounds, but interest is adding to this each month. thanks

[themas]

1. The bank will not close an account which is overdrawn.

2. If nothing is done to notify the bank of the problem, they will start recovery action at some stage - first of all by writing letters. If they get no reply they will either pass the debt to debt collectors (who will then start writing more letters) or maybe start County Court action. If they do, it would be inevitable that a County Court Judgement (CCJ) would be made because your daughter & husband cannot deny that they owe the money.

3. If the terms of the CCJ are broken (eg if it says your daughter is to pay £x per month & they fail to do so on time) the bank can start enforcement action, which can include sending bailiffs. Up to this stage, no bailiffs can come - although it is not unkown for debt collectors to send people who try to pass themselves off as bailiffs. Such people have no rights of any kind & should be sent on their way.

4. The best way by far to deal with this is to let the bank know now what the problem is, & to ask them to accept a nominal payment (such as £1 per month) and freeze interest and charges until finances improve.

5. If they need help with this they should go to the local CAB or ring CCCS. Do not get involved with any firms that make a charge for their debt management "services".

6. They must stop using the account (if they haven't already done so).

[Kristal53]

thankyou so much for that. I think the first step is to try and get the bank to freeze the interest as its around 50 pounds a month -I shall pass on this info and try and get them tackle this head on -thanks again

[boxtops]

I agree with themas - the best way to deal with it is to approach it head on, and speak to the bank. They are not the only couple finding it hard to make ends meet at the moment. They might find that taking a loan to pay off the overdraft could be more manageable, or adding the amount to their mortgage can be very effective, if more long-term. There are options, don't let them waiting until the debt letters start coming in, take positive action now.

[boxtops]

^^ and PS the bank don't mind a well-managed overdraft - some people live for years on one if funds are coming in - the bank needs to understand the position. Did they have any insurances against redundancy or job loss which they might call on?

[cathfromsaron]

ditto above advice, and i would especially echo point 4!

banks would rather talk to customers than send out letters!

cath x

[DTCwordfan]

very much point 4 - in fact you can still use the account as long as you work with them to reduce the overdraft by the agreed sum at the end of the month, that could be bringing it down by £20 a month, but if you can do fifty, you will soon be back within their usual "commercial" limit of £1500. And not exceed the ceiling by the way.....

[pretty_snowdrop]

Believe it or not £2500 is not a great amount to owe a bank, but as you are aware it needs to be nipped in the bud now. The bank needs to be notified asap and the situation explained in full. There are various avenues that can be explored dependning on their full situation. I hope it all get's sorted x