Overdrafts and fees and forced loans

[aquestionforya]

A long one sorry

Around 10years ago I (UK citizen) and my husband (EU citizen) moved to the UK after spending a couple of years overseas where he was from. We moved due to his very high paying job, which now involved a lot of moving around the Uk. Opening a joint account made sense and due to his high wages we were offered one of the premium ones in a high street bank. This included an overdraft of 15.000.

As his job involved a lot of moving around the country and he earned plenty it was decided I would stay at home (we had children). Regardless, I have never had a job that would earn enough to meet the financial requirements for a premier account.

Fast forward, DH got cancer a few years ago, lost his job, I became his carer, we moved again overseas for expensive cancer treatment which all failed and he died last summer. Due to being out of work for some time, and the high costs of medical treatment we ate through all the savings and assets and overdraft.

As it is a joint account, it is now my responsibility to pay back the overdraft. I haven't yet gone back to work (I have found the last few months excruciatingly difficult). I am looking for work now but there's no chance I will earn enough to keep the premier account (I don't care about that) but I have had a call from the bank saying that they want to basically force me to take a loan out with them to clear the overdraft so they can close the account. However they know they can't give me a loan yet as I don't have a job. So hurry up basically.
In the mean time I am paying charges and fees on this overdraft and i am in a tough spot. Luckily I have good family helping me out with bills etc but this is a huge amount for me to have to pay back.

On one hand I know the money was spent so it has to be paid back but on the other, the only reason that account was opened and large OD provided was on the back of my husbands wages. If it had been an account solely in DH name then it wouldn't have fallen to me. My brother is telling me perhaps I should argue my case but what are the chances?!

I just can't see the light at the end of the tunnel at the mo

What assets do you have? Is going bankrupt an option?

Sorry for your loss.

very sorry for your loss. I’m guessing your DH did not have any life insurance? :(

Is there a debt relief charity you can contact? Under the circumstances I think you need someone in your corner to help. Sorry for your loss x

I think you need good debt advice before you do anything, if nothing else, companies like Stepchange can contact your bank on your behalf and get the OD put on hold until you get sorted.

Overdrafts are the most expensive form of debt so they are doing the right thing moving it to a loan which will be lower interest.

Sorry for your loss, what an awful situation.

Unfortunately, it is fairly standard for a delinquent overdraft, ie one that is not being repaid each month by salary, for the bank to want to convert it to a loan. That means they will get it paid back in a known time period and also that they don't face criticism for profiting from someone in financial difficulty - it's a perpetual debt issue, which is frowned upon by the regulator.

Do you have any assets such as a house? It's not normally recommended, but with a supportive family helping you pay the bills, a secured loan might be possible, from your existing lender so they don't look at your finances too closely (although this is probably not an option if it's HSBC ).

If you do own your house, is moving to a cheaper property to free up money to pay the overdraft off, and reducing your outgoings an option?

However, if you're not a homeowner, the best solution might be a debt relief order or bankruptcy.

In the meantime, I would ask HSBC for 'breathing space'. This is an industry term where they must freeze all charges and recovery action for two months while you seek advice from a debt charity.