Hi Selleck

the bank will reduce the overdraft with any lodgements, benifits or otherwise.

My advice would be to open a new account and get the benefits paid into that, then negotiate a repayment with Lloyds.

Mark

I'd agree with Mark, Selleck. Lloyds TSB may well be happy to come to some sort of repayment arrangement and allow continued usage of the accounts, but there is always the risk of them changing the goalposts without notice. It isn't really worth the risk I'd have thought.

Hi selleck,

We've spoken to people that have fallen foul of banks seizing payments into accounts to help repay other debts. It can cause significant problems and distress.

Like Kevin and Mark I'd strongly advise that you get a new account opened.

I was on the phone to the person who advised me on TDs. He is a former employee of Lloyd's and he told me that they are NOT allowed to keep benefits because it isn't a salary-like income which can be frozen. Any thoughts?

Hi Selleck

I think this is correct in formal legal action, but not in a standard lodgement where the funds are used in the reduction of the overdraft.

As an example, if they arrested a bank account with a credit balance made from benefits you can argue undue harshness, but in normal transactions you can't.

Mark

As Mark says, there are indeed rules that prohibit arrestement of benefits, but we are not talking about formal arrestments here. I believe a bank has the right to remove an overdraft facility at any time if they wish, which would have the same impact as an arrestment.

Okay. My fiancee's bank account credit is EXCLUSIVELY made up by a payment of Her Majesty's Government's Incapacity Benefit. I moved MY salary to another bank weeks ago. There is no other credit in her account except IB. So what is the situation now?
The overdraft is still showing eg. our overdraft is ?ú1250 and we have a balance of -?ú428 as we are in our overdraft by ?ú760 or so.
What is the best dept. to talk to to try and get some of it back. They caused this mess in the first place! Twice I was made redundant because of the recklessness of investment/high street banking. If it wasn't for this recession, I'd still be quite happily paying off my loan, with NO overdraft and NO c/cards.

Hi selleck

the situation is exactly the same. The benefits will go in and reduce the overdraft.

You can try speaking to the bank, but woulnt hold out much hope of the returning money.

Mark

So have the bank frozen the accounts already? If so, like Mark says, your fiancee is really at the mercy of the bank. It is worth a try to argue that they are causing severe hardship by not allowing her to take out her benefit money - I actually wouldn't be too surprised if they did allow it.

I'll let you know how she gets on, guys.

Okay, guys. She was told by the Glasgow HO to go into her local branch. She did that and after an hour of talking, they gave her ?ú260 back from the original ?ú426. It's something, I guess, which is better than nothing. It'll be nice if this post will give others reading this (who will find themselves in the same situation) some hope that it is possible to get SOME money back.

Hi selleck,

I'm glad that at least part of the money has been repaid.

Readers of this thread will hopefully now understand the need to open a new bank account, that is unconnected to your creditors, in advance of entering a Scottish Trust Deed (or any other debt solution).

Well done Mrs Selleck-to-be, good for you