Hi,

If you have debt with the bank which you currently bank with then if you enter into a Trust Deed, DAS or Sequestration you will need to change bank accounts.

Your new bank can offer an automatic switching service to transfer over all direct debits and standing orders.

Recently a client which I have been speaking with regarding advice had an account with the TSB and a large overdraft on the account. The client organised a new account with the Nationwide and the Nationwide offered the automatic switch service.

The client didn't have enough time to ensure that her salary was paid into the Nationwide account but the Nationwide advised her that on the day the salary was due to hit the TSB account they would organise to transfer it for the client.

On the day the client was paid TSB retained all of the salary and used this towards the overdraft balance. On checking with TSB and Nationwide the client was made aware that by doing the automatic switch service TSB decided to retain any funds in the account and put this towards the overdraft. They were quick to realise that she was leaving them and tried to get as much of their overdraft paid off as possible. Nationwide apologised to the client for not making them aware of this but unfortunately there was nothing which could be done, TSB kept all of the clients salary for that month.

If anyone is considering changing bank accounts I would always suggest to manually change things over. Open a new account and sort through which direct debits and standing orders you need to change over and speak with the companies involved to do this. It will involve a little bit of work but that way you can ensure that everything that you need to transfer has been done correctly and it should avoid any potential problems.

It's just something to be aware of and something people may find useful when changing bank accounts.