lloyds tsb - internal collections - problems?

[joko]

Hi, I have been asked to pay back my overdraft in 3 weeks - i can't, and neither can i afford the weekly amount they suggested coupled with the interest - and when i discussed this with the bank, i was advised to ignore the letter and let the account pass over to collections and they would let me pay it back at a lower level so they will also need to see my in goings and outgoings and work out and payment schedule, and also there would be no more interest.

i can't help thinking there must be some downside to this? she seemed to think it was a good idea but didn't mention one.

i think she said they have their own internal collections dept - so does this mean it will not affect my credit rating?

what are the negatives of this, if any?

many thanks

also posted in law

[Mrs_Pegasus]

I remember something about this from a friend. They were unable to meet the minimum payments on their loans and to make matters worse the bank reviewed their overdraft and reduced it dramatically. They called lloyds who advised them to come and speak to someone from the collections department but certainly didnt tell them to wait. As far as I could make out she would have had her account reduced to a basic account with a cash card only and wouldnt be allowed a cheque book or debit card. Yes it will effect the credit rating.

To be honest, I would ring CCCS and see what they advise. You may have to wait for an appointment but they do offer solid advice and will work with you and your creditors. Lloyds will try and keep you under their wing because they dont want to have to speak to you through CCCS.

[joko]

Hi Mrs P,

isn't the CCCS for credit cards?
this is just an overdraft on what was an ordinary graduate account, with just a debit card.

the reason they are clamping down is because i never use the account, i use another mostly, so they presumably don't like that.

would the CCCS still be helpful? i looked on the site and the minimum seemed to be more than my debt, and i also couldn't find a phone number...?

[khana]

Having your account with Collections will effect the way you use your account. A maker will be placed on it that restricts credit for the duration that the debt is outstanding. This is an internal situation within Lloyds so the information should not be passed on to anyone else.
Have you tried asking for a loan to replace the overdraft with repayments over a longer period ?.
Avoid the collections department if you can as even once the debt is repaid, then the notes on your account will refer to the previous bad credit history and thus make borrowing with Lloyds in the future more difficult.
Of course, if its the only way forward then go ahead, its not as scary as it sounds though and is a hell of a lot better then paying lots of charges.

[Mrs_Pegasus]

Obviously I assumed by your post that the debt was much higher especially as they were looking to transfer it to the collections department. This is normally the last resort before it going external.

I would agree with khana. I am also assuming that you no longer bank with Lloyds?