Made bankrupt today, what now with my bank account?

[rosiecotton]

I was made bankrupt today with personal debts of £24k following a brief marriage and divorce. Obviously my account has been frozen.

 

I need an account to have my salary paid into and my bills paid out from, so I guess that I will now have to start looking for someone who can offer me a basic bank account with basic facilities like a debit card and direct debits.

 

My creditors in the bankruptcy were Halifax, Nationwide and Lloyds TSB.

 

Can anyone recommend a bank which might be sympathetic to my circumstances and offer me somewhere to have my wages paid in?

 

I understand the Co-op bank is good, but there isn't a branch anywhere near me any more.

[sequenci]

firstly, you will need to ensure you have the official receiver's permission prior to opening an account. I think co-op would indeed be your best bet although i think barclays also allow undischarged bankrupts.

[borisbeaver]

Nat west may also allow bankrupts to hold step accounts.

[gizmo111]

I wasn't aware you had to ask the OR if you could open a basic account, most people just do it on the way home from the court

The co-op allows you to use the post office as a branch.

[rory32]

As gizmo says basic banks accounts are available to eveyone. As no credit checks are carried out, only identity checks, it doesn't matter if your bankrupt. I have one with BOS only took a week or two to set up and activate - you get a Visa Electron Debit Card with it so a bit better than most. Most just come with a cash card. With a basic bank account you can still do DD's and SO's so no worry's there - you just don't get a cheque book or an o/draft facility.

P.S I think all basic accounts allow you to use the post office as a branch (possible exemption is RBofS).

[sequenci]

I wasn't aware you had to ask the OR if you could open a basic account, most people just do it on the way home from the court

 

i was trained that if you didn't inform them the OR could make the new account part of the bankruptcy estate!?!?! is this true/false?

 

i'll better double check!

[sequenci]

well, it has opened a bit of a can of worms with a few of the senior people here. our factsheet says the following:

 

" You will usually have to close your bank or building society account when you are made bankrupt. You may be able to open another one as long as the bank or building society allows you to, and the official receiver gives you permission to do so. It is important to wait to open the account until after you have gone bankrupt and got the official receiver's permission. "

 

however,

 

it is now being questioned as it isn't additional borrowing.

 

an interesting one!

[caledfwlch]

If your only account is a Step/Basic account and you go bankrupt, would the OR still "take" it? or would he simply grab any cash in it but leave the account open, since it has no credit facilities?

[sequenci]

here we are..

 

A bankrupt person may open a new bank or building society account, or continue to use a pre-existing account, so that s/he can, for example, have earnings or benefits paid in. If they use a bank or building society account, they should inform the bankruptcy trustee or insolvency practitioner. If he/she does not tell the trustee that s/he has assets in a new account, s/he may be guilty of contempt of court and could be imprisoned. If the trustee will not agree to them having a bank account, s/he will have to try and make arrangements with her/his employer for earnings to be paid by cash. They may find problems in opening a new account, even after the bankruptcy has been discharged. However, they may be able to open a basic bank account.

[diskmandave]

If it's any help regarding the account side of the discussion, when I was in serious trouble the CCCS recommended Yorkshire Building Society, it's as basic as it gets and that's where I still am today 9 years on and I wouldn't have it any other way. (Keep up the good work sequenci )

 

Good luck, regards, Dave.

[powelll]

Nat west may also allow bankrupts to hold step accounts.

 

As far as I know Natwest will only look at discharged bankrupts for the step account; Co Op or Barclays probably the best bet once you have permission

[yaffsimone1]

Co-op are apparantly good but they will credit check you even for a basic credit free account, i know because i have just been (about 30mins ago) been turned down! I cant understand why no bankruptcy, no history of fraud etc. and its the second bank who supposedly offer basic accounts that has done this. You could try Co-op but dont rely on them. Im going to Alliance and Leicester on Saturday (they have confirmed they dont credit check you) and Abbey tommorrow. NatWest do the step account again with no credit check. You could try those.

[Kryt]

Would any of these affect your spouse/partner?

I.e. if one was to go bankrupt, could they have their name removed from a joint account beforehand and continue to "use" the account for such things? As surely the spouse wouldn't be bankrupt?

[Gingerheid]

Nationwide are also a good one to try.

 

I think it's worth querying the Co-Op's rejection if there's a reason you do want to bank with them. They do publicise via the FSA that they are willing to give their basic accounts to bankrupts, unless there has been fraud.

 

http://www.moneymadeclear.fsa.gov.uk/pdfs/bank_accounts.pdf

 

Regardless of legislation; in practical terms the OR simply just will not object to you keeping a bank account. In fact, they will always, as long as an account is not overdrawn, send and fax a letter to the bank asking if you can keep it. This is most likely to happen where you don't owe the bank money on any other products, and will inevitably be accompanied by facilities like cheque cards being withdrawn.

 

For joint accounts banks will tend to remove the name of the bankrupt party from the account. Asking to keep your name a joint account may not be best for your situation if it could lead to withdrawal from the account and therefore your non bankrupt partner of facilities that them having may be beneficial to you both.

 

The next hurdle is the unstoppable machine problem; banks are big and have lots and lots of hands that don't know what the others are up to. You could get agreement to keep an account, and then when other left hand picks up that there's been an order from the gazette they freeze the account again.

 

For this reason I'd always in practical terms recommend

> £0 balance on date of order (within reason (maximum withdrawal wage / salary) and disclose that you have the cash on the statement of affairs, mentioning that it is wages withdrawn and needed to meet ordinary living expenses. Don't of course swipe thousands and forget to mention it; you will get done for it)

> Open new account after date of order with bank totally unconnected with past affairs

 

It's hassle you could do without, but it's hassle you are in control of and know is going to happen. It's a much milder form of the hassle deriving from turning up at the cash machine at 17:05 on Friday with 8p in your pocket and your salary fresh in your account, but getting funny beeping noises from the machine.

[midge61]

Hi

My husband was made bankcrupt 6yrs ago and the OR just checked through all his paperwork regarding debts then said right off you go and start afresh.

Hubby got a basic account with Nat West without any probs at all and has been with them ever since this summer wil be the 6th aniversary so he should then be able to get a proper account with them as all his defaults will drop from his cra records.

The only thing that did happen was that 2 years ago he registered self employed and the tax office sent his tax returns to the OR who didnt send them on to him so that took some sorting out.

Hope this helps

Midge61

[Gingerheid]

If you have a current self assessment UTR (the ten digit number) or have had one in the past before you go bankrupt, and if you then continue or recommence self employment, you need to ask for a different one to get set up after the bankruptcy.