Talking to your bank Debt Solution
Summary: Talking to your bank - This article encourages debtors to talk to their own bank about their financial difficulties.
The listening bank
Or so the advert suggests. And there are experts there who can offer advice and sometimes support. Banks are of course businesses, and have not been without their own problems in recent years. But they will listen and where possible, offer practical solutions. At the very least, informing our own bank that we are experiencing financial problems may benefit us. If a debt solution (e.g. IVA or Debt Management Plan) is put to them at some point, they are at least aware of the existing problem. Sometimes, when confronted with an IVA proposal they wonder why this is the first time they have been informed of a problem.
The advising bank
Depending on circumstances, your bank may be able to offer some kind of solution. This could involve consolidating several debts into a single loan. This is certainly worth considering, but care should be taken before agreeing to it. Whilst initially attractive, it's worth taking time to calculate the terms of the offer - work out the total amount repayable, and bear in mind the length the arrangement will last. Sometimes a bank loan will only increase our problem or disguised the real need.
The unable to help bank
Banks are not debt solutions companies. Very often, customers explain their financial difficulties and the bank cannot help. There can be some hardship programmes that bring some short term relief, but the message often the response - sorry, we can't help. But at least you have tried - and if asked in the future, we can always say that our bank couldn't help us.
The fresh start bank
When we are in financial difficulty it may well be necessary to open a simple, basic account with a different bank simply to protect our income. If our income is simply being swallowed up in an overdraft, or if creditors are simply helping themselves to our funds as they have our bank details, then it is likely to be necessary to place our income in a safe place in order to cover priority outgoings. By this stage, we almost certainly need to take professional advice from an Insolvency Practitioner or a reputable debt management company.