[Potato]

Hi,

I've got a graduate account in the UK which is valid until UK Summer 2009. I'm into the overdraft right now (it's interest free), and have a few hundred quid still "available" before maxing it out.
Apparently the bank have been sending the odd letter to my home address politely enquiring as to why I haven't been putting any money into the account. In the meantime, I've been withdrawing the odd $20 here and there from ATMs in NZ.

Where do I stand on this issue?
I don't live in the UK anymore so I suppose it's not particularly good of me to use up money that isn't even mine.
But what's the legal consequences? Am I breaking the law?

Cheers

[Moorf]

I guess as long as you pay it back when they ask for it, then I can't see why you couldn't use it. I think my worry would be if I couldn't pay it back when it was needed as a few hundred quid is a fair amount of NZ dollars.. you don't want to start incurring charges from afar on a NZ salary... :no

[Potato]

I guess as long as you pay it back when they ask for it, then I can't see why you couldn't use it. I think my worry would be if I couldn't pay it back when it was needed as a few hundred quid is a fair amount of NZ dollars.. you don't want to start incurring charges from afar on a NZ salary... :no

Yes that is a bit of a worry. If I max it out, that's £500, so about $1400. I should be on a fair bit more money by January though so that'll help out. But it's still a lot to pay back....and also a student loan of £9000 that I simply cannot wait to start paying back.

....what would happen if I just....never paid it back? Can they touch me over here?

[Moorf]

heheh I must be getting old - I was about to write a *wagging finger* post about how irresponsible that is then realiZed that that same thought would have (did?) cross my mind at that stage of my life!!

I have no idea what the deal is - I am guessing there might be some trouble if you did leave the debt there and wanted to return/register in UK again at a later date? There are alot of wiley students out there so I'm pretty sure they must have this issue locked down :D

[Potato]

Well I'd like to pay it back, if I could. So that there would be no issues were I to return to the UK. With that in mind, it's probably better that I stop plundering and leave it overdrawn by the ~£250 that it is currently...

[Moorf]

:nice1

How long do they give you to pay it back these days?

[Scotty69]

What could happen is the bank would close your account and sell the debt on to a recovery agency. There not likely to get you over here and when you go back to the UK its not a criminal offence, its a civil one so there wouldn't be a warrent for your arrest or anything like that.

[Moorf]

Yep, unlikely but entirely possible - debt collection runs across borders now with many agencies having links or offices abroad.

[Potato]

:nice1

How long do they give you to pay it back these days?

As far as I know, you get this interest free overdraft for 3 years after graduation.

Student loan is a different beast, I guess I have my entire life to pay that back. Unless they "forget" about me.

[Moorf]

According to this thread you don't start paying back until you earn 12kUKP - so you may never have to repay it working on NZ salaries :laugh:laugh:laugh

http://www.emigratenz.org/forum/showthread.php?t=16613

[Potato]

According to this thread you don't start paying back until you earn 12kUKP - so you may never have to repay it working on NZ salaries
http://www.emigratenz.org/forum/showthread.php?t=16613

Luckily it's £15k now :D
I will have gone over that in 5 months time. :(

Edit: crikey, not it's not, you're right....it is £12k. That has changed since earlier in the year when I'm sure it was £15k on their list for NZ. Are they completely bananas? I couldn't afford to start paying it back now even if they made me.

[vic11]

but don't worry because it works on how much you are earning over £12,000. So if you are making £12,001, you are only repaying on the £1. Likewise if you are earning £15,000 you are only paying a percentage on the £3,0000. So it actually doesn't work out as very much, depending on how much you earn.
(Well thats how it works for me, there may be different rules for when you took it out.)

[beth&rich]

When I was still on my interest free graduate overdraft, I went through a spell of just withdrawing too, and the bank weren't ecstatic about it.....but then they went on to explain that apparently just withdrawing and never depositing is bad for your credit rating (not sure if thats actually true), which might matter if you intend to return one day.

Also, an overdraft can be recalled by the bank without notice, on demand, so possibly best not to p**s them off if you would struggle to repay immediately. If you have an internet savings account or something (which could probably be set up by you, online, from NZ, with a minimal deposit - if its with the same bank), it might be worth just transferring £10 back and forth between the accounts once a month. Should shut them up. After all, its not a person examining your account, its just a computer looking for evidence of money going in.

[beth&rich]

ooooooooooooh, don't get me started on student loans!!

I paid them over £300 this year in repayments, and because interest rates on them (which I think are linked to inflation) are so high, the balance went down by a grand total of £8.95. Whatever happened to that great big Government lie that it would be a cheap loan? Am very bitter.

[R&A]

Luckily it's £15k now :D
I will have gone over that in 5 months time. :(

Edit: crikey, not it's not, you're right....it is £12k. That has changed since earlier in the year when I'm sure it was £15k on their list for NZ. Are they completely bananas? I couldn't afford to start paying it back now even if they made me.

You're not going crazy though - it definitely WAS £15,000! 12 seems a bit odd to me considering what I have seen of NZ wages and the cost of living - but hey ho - when did the SLC ever make sense!

[R&A]

And also - I've heard that HSBC in particular have been withdrawing the interest free part of graduate overdrafts with only very short notice recently. So if you're with them you might want to be a bit cautious about putting yourself in a position where you couldnt repay them quickly if you needed to.

[Potato]

beth&rich, my parents are depositing £10 into the account every now and then to hopefully keep them quiet.

R&A, that's a bit of a worry. I'm with Natwest. But I suppose the issue is, if they withdrew the loan and demanded repayment, I would just say "I can't pay it" (which is pretty much true at the moment). What would happen then? They won't get their money no matter how threatening they become.

[dusk]

you would be better off in that situation telling thme that you could only afford to pay them a token amount, say £5 per month - that way you are making an effort to make repayments, but not struggling to meet unrealistic amounts.

it is always better to try and deal with companies on this basis rather than ignore them :)

[thewoodies]

Just a word of warning from a "has been" ex student:laugh

It took me 10 years to pay off credit I accumillated as a student!!!! It affects everything your mortgage applications opening bank accounts the citzen advice arranged for it to be paid interest free back - but it took ages.

O im such a mum - i wouldnt have got through my degree without most of the debt and it wasnt huge!!!

Good Luck

[R&A]

beth&rich, my parents are depositing £10 into the account every now and then to hopefully keep them quiet.

R&A, that's a bit of a worry. I'm with Natwest. But I suppose the issue is, if they withdrew the loan and demanded repayment, I would just say "I can't pay it" (which is pretty much true at the moment). What would happen then? They won't get their money no matter how threatening they become.

In the cases I heard about the overdraft limit itself was not reduced but the interest free part was. So for example the overdraft could originally have been £1000 interest free and now the limit is still £1000 but only the first £500 is interest free or interest is charged on the full amount. Just something to be aware of. I'd think it was unlikely they'd demand the full amount back straight away but not impossible (I think they have to give 30 days notice but I'm not certain - probably depends on the bank.) 'Credit crunch' and all that! :uhoh