Ulster Bank Offer

[Nearlythere]

Hi,

I've been working my way through a claim for unfair bank cgharges with Ulster Bank. I have an offer of £5475 that matches my calculation of the charges owing and am happy to accept. However, I have recently separated and the joint account these charges arose in have an overdraft of £3,800.

Ulster Bank want to credit the refund to the account meaning I would have little left to pay other debts like mortgage arrears etc.

Is there anything I can do?

[WendyB]

Re: Ulster Bank Offer

Hi. Firstly, well done on getting such a good offer, especially in the current climate.
Unfortunately, when there is a balance owing on the account they will always use any refunds to reduce the balance, so no, there isn't anything you can do. But at least if the overdraft is wiped out then that's one debt less to worry about, and no overdraft means no interest so look on the bright side.

With regards to mortgage arrears, have you contacted the lendere to explain the situation and come to a payment arrangement?.

Although if this is a hardship claim there might be grounds for not having it all paid into the joint account.....what exactly is the situation? If they pay it all to clear the overdraft they would obviously be treating themselves as a prefeerential creditor, so there may be some mileage in that.

[Nearlythere]

Re: Ulster Bank Offer

I have £24k in other credit card debt, my ex has £7k and we have mortgage arrears of £950. At the moment we are both making token payments to these under debt management plans assisted by CAB. We also have negative equity on our house of £35k. As a minimum, I need to sort the mortgage arrears out and have£350 to pay for essential repairs to my car otherwise I won't be able to continue to work....

My real issue is that if I was able to negotiate with the bank, I am confident I could clear the debt by making an offer of £3000 - not the full £3,800 - meaning I would have more available for other debts.

[WendyB]

Re: Ulster Bank Offer

Well have you tried negotiating with them?

As A priority you need to clear off the mortgage arrears, which you would have enough left over to do whether or not the refund is paid into your overdraft. You would have 1600+ left which would be enough to clear the mortgage arrears and pay the car repairs. Anmd with all respect, another 800 against a total of 30k credit card debt wouldn't make much difference in the great scheme of things, IMO. If you are making token payments to the credit cards then carry on doing so as long as they are happy with them. Are there any charges on the credit cards, and if so have you started to reclaim them?

[Nearlythere]

Re: Ulster Bank Offer

I'm sure I have charges on the cards but I haven't got as far as reclaiming them as yet. I've just been reading about the first right of approriation in relation to benefit payments etc. Would this work for me?

[natweststaffmember]

Re: Ulster Bank Offer

First right of appropriation wouldn't work on a refund of charges as a gesture of goodwill from Ulster Bank. I think as WendyB has said, negotiate the way it is paid, ie cheque/direct payment to clear mortgage arrears etc,etc,

[Nearlythere]

Re: Ulster Bank Offer

Surely the refund is still technically a credit to my account (ok made in goodwill by the bank but still legally a credit) and the first right of appropritation would rest with me? Last in first out sort of thing...

Only if I don't express that right in writing does the bank have the right of offset etc.

I guess I am clutching at straws but it galls me to have my refund used to pay off the full value of the overdraft.

[natweststaffmember]

Re: Ulster Bank Offer

I had this conversation with the FOS last year in May/June time and unfortunately, FROA does not apply to a refund of charges.

[WendyB]

Re: Ulster Bank Offer

Yes I think you are clutching at straws, FROA is usually used to stop banks grabbing benefits such as Income Support etc which are needed for day to day living and basic subsistence.
And at the end of the day you do owe the overdraft and it will have to be paid off in the end. Best to try and negotiate with them, perhaps use some to pay off the o/d and come to an arrangement to pay the rest off monthly? And it is bound to say somewhere in their T and C's that they can recall the overdraft at any time, so you could end up in a worse mess.

[Nearlythere]

Re: Ulster Bank Offer

Ok - I guess I will have to negotiate as best I can. Thanks for all the advice.