HSBC - Frozen Account - Mortgage DD Tomorrow?

[custom1]

Good Evening, Im posting this on behalf my Dad, who is rather worried right now!

He is going through an IVA with debt free direct. He banks with HSBC, and has an overdraft, which he is currently in. He has been advised to set up a new bank account, but he hasn't anything to pay into yet as he doesn't get paid till the 22nd.

HSBC frozen his bank account today. Now I can sort out things like his food, petrol etc, but his Mortgage repayment with Nationwide goes out tomorrow. He is INTO his overdraft with HSBC. Now if they let this Direct debit go through, he would still be in his agreed overdraft, BUT I believe that this is their money, so Im guessing they are not going to pay this Direct Debit? Or am I wrong and they will pay it?

As it stands Im trying to come up with the money (not doing too well with 3 hours notice!) to get the cash together to pay this months mortgage if HSBC dont let it go through?

Can anyone confirm what will happen?

Kind Regards
Custom1

[12 months to go]

hi custom1

sorry i cant be sure , but i suspect as the account has been frozen today if ive understood you correctly, then nothing else will go out.

I think the only way to check would be to ask the bank tomorrow or perhaps better maybe friday

I suspect though, that if your father is not behind with his mortgage and this is the first payment that has been missed, then they will not be too hard if your father is a month behind; that said i would check there are no pemalty charges for this.

dont worry too much your father has takena big step in sorting his finances and even though you may not understand much about an IVA ( apologies if you do ) it is a responsible way to deal with debt and doesnt has the stigma of bankruptcy, no name in the paper etc

good luck to your father and be sure to keep on posting and let us know how your dad gets on

[lin.r]

Hello Custom1 and welcome to the forum.Unfortunatly,HSBC are one of the worst banks for closing accounts for people with an IVA.
With regards to your Dad's mortgage payment,I think it is probably unlikely that they will honour this payment.Why not phone Nationwide and explain that your Dad is changing banks and there has been a bit of a mix up,could he perhaps defer his payment to a later date? Mabey miss this months payment and make up the shortfall over the next few months?
I hope you get this sorted out,Good luck and let us know what happens.

[luluj]

I would encourage your dad to contact his mortgage company tomorrow and make provision for late payment etc.
HSBC shoud have given him notice of this action ...they provided 14 days notice when it was us inthis position...i appreciate though that it isn't always possible to arrange things at short notice.

Speak to the mortgage company ...hopefully they will agree at temporary solution for this month.

[custom1]

Hi, thanks for the prompt reply. Like you I am pretty sure he has "lost" what money was in there (I use the term lightly, as I am fully aware it wasn't "his" money).

As far as I am aware, he has NEVER missed a payment on any Direct Debit. Other than some bank Charges for sometimes going over the agreed overdraft, I believe his credit rating up until the IVA was pretty good. Which obviously resulted in this mess! He always lived closed to the line financially, but there was more coming in than going out, however, an injury caused alot of time off work, resulting in reduced wages, which is when the issues started.

I have obviously done a little research on IVA's, I know the basics. I know he has the "meeting" (he doesn't have to be there?) is within 2 weeks. I believe 70% of his creditors need to agree, this is currently whats worrying him. I then believe if it all goes through, His monthly payments will go from £800ish to £350ish, for 60 months and thats it cleared. I know he possibly wont be able to get credit, and he will need a new bank account, but thats my understanding of it. If I am honest, I dont get how this works, Im guessing the Government get involved, or the creditors just cut their loses and get something as opposed to nothing, I dont understand that part but hey?

We are very worried about the decision, is the frozen account a good sign, or just a normal part of the process even if it doesnt get approved?

[custom1]

I dont even think its been 14 days since he started filling the forms in, and regards to notice, I do not believe he received any, he was quite shocked/distressed when I took him to the cash point earlier!

[12 months to go]

Hi custom1

explain to your father he need not worry about the creditors meeting that he deosnt need to attend ( indeed its usually creditors voting by fax or email )

Very few IVAs are not accepted and yoru IVA co are experienced and know whats likely to be accpeted. at worst the creditors may want to modify the proposed payment slightly

In terms of a new bank account , i believe co-op are IVA friendly. you need to go into the branch in person and complete an application form for a basic account DONT MENTION THE IVA THOUGH ( they wont ask so you wont be lying ). they have to send the form off but this is normal. 4-6 days later if not less your dad will get a confirmation letter through the post and a basic debit card soon after.

hope this helps & dont forget to keep asking anything your unsure of. FYI Im not an expert, but have just come out of a 6 year IVA and have been using and reading the forum for a few years now, so have been there and worn the tshirt so to speak

[custom1]

How come yours was 6 years? Thought they were all 5? He is going into Halifax tomorrow to set an account up, but has previously told them about the IVA? Shall I send him to the Co-Op? Im guessing he will just have a basic account no overdraft etc (good thing!)

[Foggy]

Hi Custom. I am afraid HSBC are particularly anti-IVA and will close accounts even if you don't owe them money! Maybe the IVA firm should have seen that coming and advised accordingly!

Yes, you are correct in that, once payments are made then any debt left is wiped off -- as you say, the creditors are "happy" to get something back, rather than nothing. They have has enough interest over the years, I am sure, so won't really be losing out!

[mazbrown]

Hope you get this sorted , it's awful for your dad and extremely stressful , he is just starting on his iva journey , it will get better , thinking of you today ..

[custom1]

So what are his options, assuming we dont get a penny out of HSBC. We went through his direct debits he is going to miss between now and his next packet, and it amounts to just over a £1000. Is it worth him ringing all his creditors and explaining something like he has just changed job and has to work a week in Lieu and as a result see if he can make his DD payments later. Its things like car insurance, water, electric etc

Thanks

[lin.r]

First of all,don't worry!I know this is easy to say but I wouldn't worry too much about one missed payment here and there.
I agree that your Dad should make a call to all the companies that he will not be able to pay this coming month and try to work out some sort of compromise.As long as they are aware of what is happening and not ignored they should be willing to help.
Good luck and keep posting,things do get easier!

[Shining]

Hi and welcome to the forum from myself. You dad will be able to catch up on utilities etc., over the next month. encourage him to get that bank account sorted and many only need as little as a £1 to open an account. HSBC are known to do this. His salary needs changing post haste to another account or that will be swallowed up by the HSBC if paid into there.

[custom1]

thanks for all your helpful replies

[Blaster]

Hi and welcome.
There is plenty of good advice in the posts above and I would emphasize the ones that say DON'T WORRY.

I was a customer of Midland/HSBC for 40 yrs and when I went to them for help as my situation grew worse, I was dropped like a hot spud. Fortunately for me they made their position clear so I went around the corner (literally) and opened an a/c at Co-Op bank. I too had £1k overdraft with HSBC but was able to transfer wages and DD's etc immediately and before IVA was active and a/c closed. My mortgage with HSBC is to die for at less than 2% and not in arrears, and now paid monthly from Co-op -something of a paradox, as HSBC could have lent on my equity to save IVA action. Their mistake, my gain. I take it that you have included your overdraft in the creditors, IP should have done that.

Now a third way through and looking forward to debt free retirement. This action does take some thinking about but for us it is the only way. For me it was the shame and the thought of letting my family down that was the worst, but that has all past now and I can see the way forward to be clear and never going back. We wish you all the good fortune and DON'T WORRY!