# bank closed current account for being overdrawn too long



## Sam (1 Mar 2010)

I have a friend who told me about her financial situation today and was looking for advice. I don't have the knowledge to do so so I'm hoping someone here will be able to help her move in the right direction:

She bought a house in late 2007 and currently has it rented out. She herself lives in rented accommodation in another city where she used to work. About 12 months ago she was cut down to 4 days a week in her job and it was at this point that she started to go into debt. This was exacerbated when she decided to go back to college as a mature student and lost her income. So now she works about 10 hours a week to pay her rent and her mortgage is paid by her tenants but this left her with no extra room for the inevitable incidental costs. In the meantime she has an unpaid loan, credit card debt, an overdraft, mobile phone bills and heating bills. She used her grant to pay mortgage arrears but she is now behind on that as well. 

This has all come to a head with AIB closing her current account last week. So now her tenants can't pay money into her account as well as all the other problems that this entails. On top of this she believes that her house is in negative equity so that even if she were to sell it wouldn't help the situation.

What can she do?
Who should she speak to?
Her bank account was closed last week but she only told me today as she's been sticking her head in the sand through sheer feer of addressing the problem.

She knows she's made financial mistakes and I believe she's prepared to lose the house but the one thing that she wants to preserve is her college positions as she's doing a course that will (in 3 years) lead to a potentially lucrative career in the health services. Is there a danger that she can be convicted over non payment of loans?

Apart from MABS and organising a meeting with her bank manager I didn't really know what else to tell her.


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## jhegarty (1 Mar 2010)

Was this an authroised overdraft or an unauthoised overdrawn situation ?


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## Sam (1 Mar 2010)

Sorry-I didn't realise I was to use a particular format in this section of the forum-mods can you move this to the relevant area please.


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## Sam (1 Mar 2010)

jhegarty said:


> Was this an authroised overdraft or an unauthoised overdrawn situation ?



Not sure but at a guess-unauthorised


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## RIAD_BSC (2 Mar 2010)

Your friend is paying the price for going back to college when she patently couldn't afford to. It's unfortunate for her, but that's the reality - her problems are entirely self inflicted.

MABS may be able to negotiate with her creditors on her behalf, but it is unlikely any of them will wait three years for her to qualify before getting any of their money back.

Re the house, she should be happy to lose it. It is costing her money. How deep is her negative equity? How much does she owe on the mortgage and what is its realistic value?

Her creditors are likely to register court judgements against her unless she works out a deal with them asap. If they do register judgements, her credit rating will go down the pan and she'll still owe them the money. She needs to talk to them asap.

Can she not go part-time at college and do the course over a longer perod of years? At least then she would have more time available to work and address her bills crisis.

It doesn't sound like your friend can afford to be a full-time student at this stage, although she should fight as hard as she can to preserve her position if she believes it will pay dividends later. But her creditors will take some convincing, I'd imagine.


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## giles (2 Mar 2010)

Your friend should of went to MABS and spoken to her bank manager months ago when she decided to give up work and go back to education. I'm all for improving yourself but she's been very foolish. What did she think she was going to live on?? Fresh air?? Did she seriously think her actions through? Shes brought this mess on herself which urks me when there is so many people in the same position through no fault of there own. My advice - get a job and pay your bills!!


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## dmos87 (2 Mar 2010)

Can she defer her course for 1 year? She needs to start earning some money to fix this mess...1 year would help somewhat although its obviously not going to solve all her problems!


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## truthseeker (2 Mar 2010)

Sam said:


> About 12 months ago she was cut down to 4 days a week in her job and it was at this point that she started to go into debt.


 


Sam said:


> This was exacerbated when she decided to go back to college as a mature student and lost her income.


 
Clearly she was already in debt when she decided to chuck the job and become a student. Its not a responsible thing for her to have done.

It seems she needs to quit college and get a job - she cant afford to be there.


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## Sam (3 Mar 2010)

Ok the latest on this is that AIB and Visa have passed her bank and credit card debts over to two debt collection agencies who have contacted her regarding repayment options.

Is there any way out of this bind that doesn't involve her quitting college? Even if she were to quit or defer it's not the best time to be trying to pick up a job to try and clear her debts. 
Are you saying that she'd be best even to quit and move back in with her parents in her home city and go on the dole and put it all toward her debts?


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## jack2009 (3 Mar 2010)

How much in debt is she?  How much is her rent and other expenses that she could cut out?  Perhaps if the debt is not too high and she was prepared to live a very modest lifestyle for say 12 to 18 months she might be able to settle with the banks.


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## Noor77 (3 Mar 2010)

Sam said:


> Are you saying that she'd be best even to quit and move back in with her parents in her home city and go on the dole and put it all toward her debts?


 
She needs to defer her course and get a job. Any job. She is not in a position to even consider staying in college at the moment. Why on earth would anyone in financial difficulty decide to go back to college full-time. It makes no sense whatsoever. And as for using grant money to pay mortgage arrears....???

Yes, the bank will obtain and register judgments against her. Gas and Phone companies etc... will register debts of as little as €300 - €400. Banks generally start to register when the sum is over €1000 - €1,500 but there is no hard and fast rule. 

She is living in cuckoo land if she thinks she can hide from the debts for the next three years.


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## hiagain (4 Mar 2010)

Maybe she could study part-time.  This is the reason people do study at night


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