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Original poster

Bank Question - can a bank take loan payment from a joint bank account without permission?

29 replies

BanksAreHoles · 10/01/2011 20:11

If the loan is in a different name?

Let me explain.

Scumifax removed by overdraft facility with two weeks notice just as maternity leave ended, and with my DH out of work (made redundant). I had £800 overdraft, and always lived within/up to this, have done for years. Then, they removed it, to zero, instantly, not gradually, but bam done. I made a payment plan with them to reduce this from DH and my joint account to save the risk of them taking the whole lot from my wages/tax credits which I had changed as soon as I got the letter telling me this - they said they were allowed to do this between bank accounts and so did terms and conditions of joint bank account.

Alongside this I have had a £10k loan coming out of that individual bank account, from my student days at a rate of £190 per month, and have £700 left to pay off. I stopped paying, well, let me be truthful here - i could not be bothered to set it up again to come from joint bank account as they had pissed me off/taken away my bank account for no good reason. They could wait for their money. Which was a bit silly as I only had 4 more months left to pay!

I now have received a default notice on the loan account which also said they will potentially take the money from another account held with them. They also said they will terminate the agreement on x date (passed) if no payment received. I called them, offered a payment plan, they refused unless i give them a full breakdown of my income/expenditure (which tbh they have already!) which I am not prepared to do.

My long winded question is - can they deduct the outstanding balance from my joint bank account if a) the loan is in a different name (maiden name) to the joint account and b) the agreement has been terminated and c) is the loan a 'bank account' and can they freely access my other bank accounts?

(I have no issue paying them, always intended to pay them, just when i can afford it, not dictated to by them, I have had my overdraft for years and years, and they took it from me at the worst possible time in my life).

OP posts:
Honeydragon · 10/01/2011 20:15

If the loan is with halifax and your jpoint account is with Halifax, yes, they can do this. If you default they will immediately try and claim the full balance as they will end your terms.

Honeydragon · 10/01/2011 20:15

Sorry Sad

Original poster
BanksAreHoles · 10/01/2011 20:20

even if joint account is in a different name?

fuckers. excuse my language but they have really fucked me over.

Funnily enough, the person i spoke to on the phone indicated that the loan agreement has not yet been terminated, although the letter sent said it would be. The letter stated it would occur on x date with immediate effect if no payment made, but the man said not. He said they would pass to a solicitor.

OP posts:
Original poster
BanksAreHoles · 10/01/2011 20:24

what is default exactly? what is the difference between default and terminated agreement?

And. Do they time it to be taken when I have just been paid? what if the payment is not the correct amount, but shy of it, do they take what is there?

I suspect if i write to them and cite the whole SAR thing, get my file sent to me to check the agreement, and then offer a payment plan in writing they might agree, but in the meantime, I don't want them to take the money as soon as it goes in. I have two young children to feed.

OP posts:
Portofino · 10/01/2011 20:29

I think you are being a bit naive. An overdraft is a service, not a right. If you have had it for years, never attempted to clear it, and there is evidence that regular payments aren't going in, then they WILL reduce/cancel it.

You should have gone to your branch to sort all this out rather than "not being bothered". You OWE the bank money. They are quite within their rights to ask for it back, or ask for info on how this can be repaid. They are not "fucking you over". I appreciate the timing is crap, but YOU need to take responsibility for sorting this out with them.

MarionCole · 10/01/2011 20:31

Asking for an income/expenditure statement is absolutely standard if you are trying to renegotiate repayment terms with a bank. They may have it, but they need you to confirm that nothing has changed.

Original poster
BanksAreHoles · 10/01/2011 20:39

porto until they removed the overdraft, I paid all my wages/CTC etc into it, and it used to be £1000, I do understand what you are saying, but I have been very responsible with my money for years and years and have worked so hard to reduce my debts.

When my DH was made redundant, I spent a long time talking and negotiating terms and repayments with potential creditors so my bills did not escalate. I now, for example pay back £70 to electric each month to reduce the debt I knew would occur in the last few months of ML. I paid this loan as priority along with my mortgage. I just got fed up with constantly trying and the this, which would mess it all up. I know i should have gone into a bank and spoke to them, but the Halifax are not exactly known for their customer service provision.

OP posts:
Original poster
BanksAreHoles · 10/01/2011 20:41

marioncole they can see in my joint account exactly what goes in and out! It is not rocket science to see I am living hand to mouth. And then what, they see I have nothing to spare? I offered them a reasonable sum, it is more than I can really afford but I will trim some other payments to make it.

It is so bloody humiliating.

OP posts:
Original poster
BanksAreHoles · 10/01/2011 20:46

And, as I said. I will be paying it all back but at a rate I can afford. I will not default on my mortgage to do it. I have never missed a payment on that. So if they are going to take it from the joint account, we shall have to move everything again, to DHs sole account and I will be without a bank account completely and they will get what I can afford each month.

OP posts:
Honeydragon · 10/01/2011 20:57

Your loan might be in a different name but they have all the proof they need that you are one and the same person in house. If the loan was with another account hey could not do this.

The person you spoke to who mentioned a soliciter is trying to scare you. There is now way they would pay a solicter to chase up what to them is a low balance. At present they can offer you a pay,ent plan at their discretion if you provide your income and expenditure to them. Make it realistic and be prepared for questions you may not feel are relevant. They will push for all the arrears to resume the loan.

There next step is to notify you your contract is terminated. They cannot default you until you've failed 3 months payments. Then they can default and pursue full balance and the balance will increase as they will recalculate all interest payments and charges on top.

They will for a period chase you before selling your debt to a debt collection agency. They will not use a solicitor. They may threaten to close your account too, but as it is joint I doubt it as it would not be in their interest business wise.

Honeydragon · 10/01/2011 21:05

Fuck, you have a mortgage is that with them too?

Right ....

hey can see in my joint account exactly what goes in and out! It is not rocket science to see I am living hand to mouth. And then what, they see I have nothing to spare? I offered them a reasonable sum, it is more than I can really afford but I will trim some other payments to make it.

They will still expect a income and ex to justify this ... you have to do the work for them. It is a arse I know.

Because of your mortgage and credit file I think a more expensive but better option for you is to provide the inc/ex to them and let them talk you into rescheduling the loan. You'll pay less per month, have higher interest but lower repayments. This is a nasty way of fucking you over BUT if you get your situation sorted you can pay more and reduce the interest quicker.

If you leave everything and bury your head in sand they may threaten you with a charging order against the property which will bugger you when your mortgage is due for renewal...I very much doubt they would do it, it depends whether they try and roll the loan and overdraft to one debt.

I am not saying any of this will happen I am trying to think of what threats implications they will be utilising to get you to pay in full.

You must sort out income and expenditure for them or till will continue to be arseholes.

Original poster
BanksAreHoles · 10/01/2011 21:06

I am not so worried about the default etc, it will only affect me if I need credit again, and I cannot see that happening in a looooong time! we stopped credit a while back, no credit cards any more, or new loans after this one (consolidation of mine and DHs student debt), no catelogues and I don't even have a mobile phone.

I can deal with/accept debt collectors chasing me, although I am sure it won't come to that, i will sort out a payment plan i guess. I am more bothered about them taking it all in one go from my joint account, which you are saying they CAN do, i guess it is just a matter of time if I don't put a payment plan into place.

OP posts:
Honeydragon · 10/01/2011 21:06

Oh and reference to terminated contract, effectively you have terminated the agreement through non payment legally they have to issue this so they can default.

Original poster
BanksAreHoles · 10/01/2011 21:06

No, mortgage is not with them! Thank god.

OP posts:
Honeydragon · 10/01/2011 21:12

They can and will get something sorted, try not to damage your credit file further....you will need in regards to the mortgage.

Halifax are notorious for sudden knee jerk reactions like this. It is sometimes better to sit with someone in branch with your inc/ex and get get them on the phone to the loan people chasing you (you provide authorisation) and get them to negotiate for you. You have more leeway then.

Original poster
BanksAreHoles · 10/01/2011 21:13

why will it affect my mortgage? i have one in place which i am happy enough with, and given our significant reduction in income, we would never be able to get a better deal than we are on now...or, do they remove mortgages at random too?! Shock

OP posts:
Honeydragon · 10/01/2011 21:15

Excellent! Phone them, sort something out pronto then. And I'd transfer ctc and cb to your partners account or try and open a basic account elsewhere asap to be on the safe side

Original poster
BanksAreHoles · 10/01/2011 21:19

So why did I not need to do this to agree a repayment of my overdraft? they asked for no income/expenditure, I just agreed a payment plan of (get this) £12 per month (so they can be reasonable if they want to). The rub is that I have lost the account, but no interest is charged now, which is not bad. And clearly they wanted rid or else they would have written to me telling they would reduce by x amount each month AND continued with charging interest, taken directly from joint account.

I guess they can't do that with a loan, different set up? well clearly they can't.

OP posts:
Honeydragon · 10/01/2011 21:21

No if the mortgage was with Halifax they'd use it to play silly buggers.

On very large defaulted debts if the mortgage is your name they can apply a charging order and secure a debt on your property.

Your loan balance is too small to do this BUT it doesn't stop them threatening it anyway. They assume you are not aware of the law (or don't go on Mumsnet) Grin

Moneyexpert forum often gives good advice on handling creditors, but its normally best to talk to them. Offer a little lower so they can push you higher. And stay firm on what you can afford to repay. Don't be forced into an arrangement you won't be able to stick to.

Original poster
BanksAreHoles · 10/01/2011 21:23

i doubt i will get a bank account elsewhere? I don't mind being untied to corporations any more. I have got rid of mobile phone, have no credit cards any more, this loan was the last legacy of the Students Who Spent Too Much, a consolidation of mine and DHs student debt. So close.

OP posts:
Honeydragon · 10/01/2011 21:27

So why did I not need to do this to agree a repayment of my overdraft? they asked for no income/expenditure, I just agreed a payment plan of (get this) £12 per month (so they can be reasonable if they want to). The rub is that I have lost the account, but no interest is charged now, which is not bad. And clearly they wanted rid or else they would have written to me telling they would reduce by x amount each month AND continued with charging interest, taken directly from joint account.

Put simply .... different departments, different targets. You are putting money into your account that they utilise, you are repaying the overdraft over a long term which means they have you stuck where they want you.

The loan they have different criteria, and targets to achieve. You've paid most of it off, they've made good money and want their pound of flesh to. The negotiaters will have been trained to be aggressive.

Plus with the overdraft you could argue it was irresponsible lending on their part given your outgoings vs income. With the loan that is not the case.

Rhian82 · 10/01/2011 21:29

Co-op do a very basic bank account that you can get no matter what your credit rating. Might have to have an Electron card if your rating is really bad, but you won't know till you try (and most places accept them now anyway).

Original poster
BanksAreHoles · 10/01/2011 21:32

jeeeeez all about bloody targets...!

i think i will call them then as DH would prefer they did not remove our joint account Grin he gets annoyed enough when I can't find my card and hassle him for money as it is!

So, what is reasonable to offer on £700? I can't afford anywhere near the £190 monthly payment I would have been making.

OP posts:
Original poster
BanksAreHoles · 10/01/2011 21:35

rhian oh do they?! oh that is worth knowing, I might pop in. I like the coop actually and I don't mind it being an electron card. You can have DDs coming out of them can't you? What are the other restrictions on electron? I am not bothered by fancy stuff like mobile phone cover. I just want to be able to buy food/petrol and pay bills. We use cash were possible as we keep better control over our money.

OP posts:
Honeydragon · 10/01/2011 21:44

What are the arrears? They may get you to try and pay in full before negotiating?

Say the interst and charges etc come to £100 all in, you could offer to clear in 12 months at around £85?

But offer £12 on the basis that they negotiated that for a overdraft of the same amount.

Hopefully if you keep to that they will demand
payment in full
you refuse.

payment in 3 month refuse then 6 month. If they finally offer 12 month you accept whilst sounding worried. Or negotiate/ hold out longer terms for what you can afford based on that example.

Call the comsumer credit counselling service too, its free and they provide good advice.

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