Sick with worry over finances

[SomeoneSomewhere21]

This will be a long one sorry but trying to give all the info. Been awake most of night worrying over financial mess and physically sick with worry.

We have debts which I’ve been trying to manage so started a DMP with stepchange a year ago. Been paying £89 per month towards loans, card and overdraft which after recent review went down to £57 per month.

Woke up yesterday morning and without any warning at all bank have removed the £900 overdraft. Right now account is £500 overdrawn and they won’t honour the council tax due tomorrow and other direct debits.

Spent hour on phone to bank and although they eventually conceded they failed to notify us (no text, email or online document- possibly a letter by post we have not received) they will not reinstate the overdraft. I logged a complaint but they can’t say when I’ll hear back.

WTF do I do now? What are the chances they’ll reinstate the overdraft? I have about £20 to last me until the 21st.
I need at least £350 to clear the DD’s and get us through the next 10 days but I have literally £20 to my name. Credit cards closed as I was advised to when took out DMP. No chance of getting any other loan and not advisable.
I guess I could then close the joint account and the £550 would just sit there being cleared by the DMP?

My head is a mess, I’ll contact the council and recipients of other DD’s tomorrow to say we have no way of paying them but this’ll surely screw up credit rating even more? Am I missing some obvious answer here? Can the bank just remove overdraft overnight with no warning?
All bank offered was possibility of giving us a £50 hardship Fund payment but I have to go to main a branch and it’s at their discretion so I’d have to take morning off work to go to bank with no guarantee.

Call step change first thing. I have no idea if the bank will reinstate it but I think step change are probably the best people to speak to.

I thought, though I am no expert, they couldn’t do this as it would cause more financial difficulty. Seems counter intuitive.

Thank you for replying. I will contact stepchange later today if I can. Trying to put on a brave face around the kids N and not let them overhear too much.
I did say to the bank on the phone that by removing the overdraft overnight, with no warning it’s put us in a very serious situation not being able to do the food shop and unable to pay bills tomorrow but they just said they can’t do anything.

Call your council tomorrow. They have emergency funds for this type of thing. They will put a hold on CT so it doesn’t eff up your rating.

They will provide a food bank voucher, and possibly will pay any urgent DD, but depends on their discretionary fund.

I wouldn't rely on your council providing you with actual funds but they probably will provide a good bank voucher.

Also I would be surprised if your bank reinstates your overdraft, and if they do it's highly unlikely to be within the next 10 days. Is it included in the DMP?

Excluding the DDs, how much of that £350 do your realistically need until payday? What do you really, really need to pay for to survive for the next 10 days, it isn't actually a long time, there will be a way to get through it until your get paid. What do you need for food, transport, work it out, who can you ask in your real life for help.

Then, presumably as you're on a DMP, you will have enough money to meet all your payments next month, and the following month etc - so it will only be this one lot of DDs that will be missed.

You will be fine - it feels disastrous now and you've obviously had a tough time with money over a long period (DMP says that) but it will be ok. It might be a difficult couple of weeks ahead but it will be ok.

Definitely call the council about the missed Council Tax pyt though, that can ever quite serious quite quickly so best to be proactive with that one.

This must be very scary. Take a deep breath.

https://www.stepchange.org/debt-info/overdrafts-things-to-consider.aspx This page explains that unfortunately banks can withdraw overdrafts.

Tomorrow you must phone a charity and they will tell you what to do next.

You can keep posting if it helps to have some support.

Can you write a list of exactly how much & what your DDs are that need to go out in the next couple of weeks? Don't if you don't want to post details, but people will maybe help you identify which are critical and which can delay a little.

I'm sorry OP. I know how hard it can be when these things happen and all the extra emotions that come with it.

Would you feel comfortable posting on Moneysavingexpert.com? There are some very experienced and non-judgemental contributors who will be able to give you advice. Perhaps read some of the other threads to get a feel.

https://forums.moneysavingexpert.com/categories/debt-free-wannabe

I agree Stepchange would be your first port of call. Do you own or rent at the moment?

Oh dear. But try not to worry.

In order of priority, you need to think about:

Food and other essentials
Council tax
Other bills
Overdraft
The DMP

Can you use the little money you have, combined with what you have in, and any Nectar/Tesco etc points to manage to the end of the month? If not, ask for a referral to a food bank parcel. Also if you have any family members or close friends who you could invite yourselves to for a meal, do that. Whether or not you tell them about what's happened, it's up to you, depending on the relationship you have with them.

You cannot get behind with the council tax and they will be on to you. However, you could try calling up and explaining you have a temporary cashflow problem, but can you renegotiate over the rest of the financial year. If you pay over 10 months, ask if you can spread the remaining year's payments until March, starting with after you next get paid. Or what else they suggest, they will be a lot more accommodating if you approach them before they chase you.

Other bills are less of an issue, but you'll need to contact them to find out what they plan to do because you don't want them keeping trying over the next few weeks to take the money again. But if you tell them you're in debt and struggling to pay your bills, they have to help you and they might have hardship funds that can give you a grant.

When did you start using the overdraft? An overdraft is debt, so if you were using it before you started your DMP, it should have been included in that. If you started it after you started the DMP, you shouldn't have been using more credit, which is a sign that the budget that's been agreed as part of the DMP is not sustainable, as it doesn't adequately cover your essential expenses, including those which occur irregularly, a small emergency fund, and a small amount of discretionary expenditure, because you're not expected to completely go without anything nice just because you're in debt.

How much do you owe, do you rent or own and did SC talk to you about any other solutions? Have your circumstances changed at all? It's just that a £57 DMP payment is very small, so would take a very long time to get out of debt, so might not be the best solution, especially if it's going to run for a very long time. Depending on your assets, a DRO, bankruptcy or an IVA if you're a home owner might be more appropriate.

Did step change tell you to open a basic bank account elsewhere? I'm on a dmp too and also had an overdraft and was advised to open a new bank account and transfer wages etc into there so it couldn't get taken up by the overdraft.

I think a few different banks do basic accounts with no overdraft facilities and just a debit card. I know may not help much now but might be better to get a new account going forward.

Yes, @WavyLines11, that should have been the advice. Open a current account with a bank where you don't have any debt. As well as basic accounts, there's also all the new app based banks like Starling, Monzo etc, who only do an identity check if you're not applying for an overdraft, so should be easy to get.

Get another account immediately and make sure wages go into that.

Call council and explain situation.

Get a food bank referral -

We had this happen once before on a business- overdraft just removed without prior notice.

Dent or more debt always a good idea to have a few bank accounts.

Thank you everyone for your replies, it choked me up that complete strangers bothered to help me. I’m usually sensible and level headed but this has knocked me for six and I just couldn’t function earlier.

Ive been on phone/internet a lot today trying to sort it all out. In the end I had to admit defeat, swallow my pride and ask a family members for a little help. Council tax is now covered and small food shop so that’s something. Rest can be sorted bit by bit.

Been such a shit weekend but your kindness has helped hugely thank you. Speaking to step change tomorrow as well.

Really pleased to read that.

Well done for asking for help. I was in this position for a while, and it felt humiliating. Now things have turned around, and I’ve been able to help friends and family when they have needed it. What goes around comes around, and I’d far rather my friends asked for help rather than struggling in silence. Good luck over the next few weeks.

im sure that you can’t have an overdraft on a DMP, it’s a debt that they should know about, so you either didn’t tell them or you got it after the plan, we’re you fully upfront with them. They are very good so don’t worry to much , speak to them tomo.

You’re talking rubbish.

they may have some funds but in reality they will want this paying, but council tax payments will not affect your credit rating, they don’t appear on any credit checks

Nope not the in the slightest. I work in my council discretionary fund department.

Not all councils work the same, yes. But mine would cover something like this.

That surprises me, but ok

i am 100% correct about the credit file though, council tax isn’t on it

Are you with Barclays by any chance?

If they've withdrawn the overdraft will you now be charged huge interest on the £500?

Hi, are you able to sell anything to get some money quickly. Maybe on Facebook marketplace? Just a thought.

OP I hope you're feeling a bit better.
Please know this could happen to anyone.

No practical advice but sending you a handhold OP. Hope you get things sorted and make it through to payday.

I am sorry to hear about your situation. It must be so stressful and frightening. It looks bleak now but it will get resolved. I would also recommend CAP (Christian’s Against Poverty). They are very good at resolving debt crises https://capuk.org. You don’t have to be a Christian to access their free professional help and they are regularly recommended by secular organisations, such as Martin Lewis on Martin’s Money Saving Expert. All the best, you will get through this.

I'm glad to see you have some assistance from family. You are going to need to arrange a new bank account asap if that is where wages go. Now that is something you can do online. You will need to contact all direct debit organisation to explain you are without funds. They may well spread this months debit out over the rest of the year. Main thing is to keep a roof over your head and food in the kids stomachs. Is therd a foodbank you could use?