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Avoid debts with the bank where your wages are paid.
You should always avoid debts with your bank where you maintain your current account. This is because your bank can help themselves to money owed to them whether you can afford it or not.
The Right to Offset
If you have payment arrears with a loan from your bank, they can help themselves to money in other accounts, whether it be a savings or current account to make up the arrears. This is regardless of whether you can afford it or not. This is called the “right to offset”.
If you enter into a debt management programme or an IVA, you will have to arrange for you wages to be paid into another account to avoid this from happening. This provides a safe haven for your money and allows you to be able to treat all your creditors equally.
I was prompted to write this today as I have just got a letter from my mortage lender (Cheltenham and Gloucester) who are owned by my bank (Lloyds TSB). They informed me that legally, my mortgage lender is now to be considered to Lloyds TSB PLC and that any mortgage arrears can be collected without my consent by virtue of the Right to Offset.
This is in no doubt in response to the growing number of people suffering from recent interest rate increases and finding mortgage repayments a struggle.
Please comment:-
Have you found difficutly in opening a bank account due to bad credit?
Have you been a victim of you bank taking money from you that you can’t afford?
Please share your experience with others by leaving a comment.
One Response to “Avoid debts with the bank where your wages are paid.”
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September 10th, 2007 at 4:13 pm
Don’t feel any loyalty towards your bank, it sees you only as a money making opportunity.
I have seen many instances of people losing houses because a bank has suddenly and unexpectedly withdrawn an overdraft facility, leading to no money being available to pay a mortgage or rent payment.
Even worse are the cases where banks refuse to honour mortgage payments to themselves because they have used all the available funds to pay overdrafts, credit cards and loans. They then instigate proceedings for further action on the mortgage that they refused to pay because they had themselves taken all the money. Absolute madness!!
Getting a new account couldn’t be any easier, even if you have adverse credit.
Feel free to call me direct on 0161 905 8813 for further assistance.