Unauthorized checking account overdraft.?

Question

An employee of mine is going crazy over his checking account, can anyone offer him some advice, I have no idea what he should do..

He has a checking account at a local bank, with an overdraft that he has used to the max, $3500.

In addition the bank has covered checks that he has written, for about $2500.

The second account is an unauthorized overdraft, and the bank is about to close his account as it has been owed for nearly 45 days.They will then send the matter to collections., which will mean he cannot get another account, and his credit will be destroyed.

He has been banking with them for about a year, and due to personal problems has always been overdrawn, but has always paid it, including the fines & fees they add on.

He has asked for an extension, which they will not give him.

What will happen if this goes to collection, he is in a real mess, but will have the money to pay this soon.

He feels that if it goes to collection he will have some time to rebuild his credit, but what is the real picture???

He has until monday to sort this out.

He also has a

Answer 1

if they won't work with him, there isn't much he can do. Once the bank closes the account due to INS funds, they post this on your credit report, which will make it harder to open up an account at any other bank. If this happens, he needs to pay his bills by money order and try to get everything paid up and resolved.

Answer 2

Sorry, I don't think VT was abusive in the least.  And I completely agree.  It is extremely unusual for the bank to allow such a float.

The excuse of his father's death really isn't much of an excuse.  The father's estate is responsible for the bills, not the son.

Perhaps you can help this employee out by giving him a salary advance to bail out his overdraft problem.

Answer 3

Your employee has more problems than you realize.  Look at the title of your post--"unauthorized account overdraft."  You never seem to explain what that is, but it certainly sounds like it's more of the same.

Your employee has overspent.  He's used debit cards and written checks when his account had no money in it.  The bank could have (and probably should have) declined all of those transactions.  Instead, they triggered overdraft protection (and $40 fees with each transaction) putting him further and further into debt.  

Even with outrageous fees and high interest rates, to be $6000 in debt requires your employee to not be living within his means.  You say he has personal problems, but they should have been a one time ding, not a perpetual problem.  $6000 could not have happened overnight.

Yes, he's going to hit bottom.  Apparently he needs to.

Answer 4

I have worked in the banking industry for years.  Unfortunately, I've come across these types of situations frequently.  In this case because the accounts has been overdrawn more than once in the past and he has exceeded his limit the only thing for him to do is PAY off the overdrawn account.  If he is able to speak with an account representative at the bank or at least try and get the managers help maybe they will be able to reverse some of the fees (if he acquired any).  

He will most likely not be able to open any accounts at this company he is banking with, if he is unable to pay off the account balance due in full, I suggest he go to another bank and try to open an account.  If he is not going to be able to pay off the balance by Monday and he knows this for sure, he needs to go and open up another checking account else where.  The reason I say this is because once it gets sent to collections it will be reported onto Chexsystems (stays on your record for 7-10yrs) and this will definitely not allow him to open up any checking/savings account.

In the meantime persuade your friend to speak with a manager/account rep. to try and get any fees reversed to help minimize what he owes, go to another bank/credit union to open up new accounts (make sure he doesn't BOUNCE any checks on the new accounts) Also, tell him he needs to PAY off the owing balance immediately!

Good Luck with everything!