My Bank Account and Bankruptcy
You are allowed a bank account if you go Bankrupt. However it is likely that the one you are currently using will be closed.
- Can you have a bank account if you are Bankrupt?
- How to open a new account for use during Bankruptcy
- Can you use your Partner’s bank account
- Bank account options after Bankruptcy
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Can you have a Bank Account if you are Bankrupt?
You are allowed to operate a bank account if you go Bankrupt. However the account you have currently been using may be closed.
If you have savings over and above what you need for your regular expenses the Official Receiver may instruct the bank to freeze your account.
Alternatively the bank itself may close the account because they no longer want you as a customer. You may not owe them anything. However their internal policy may be that they do not want to operate accounts for bankrupt people.
Your bank will be informed that you are bankrupt both by the Official Receiver and by monitoring the Insolvency Register.
How to open a Bank Account for use during Bankruptcy
There are a number of banks which now offer accounts that will remain open during Bankruptcy. If you are worried that your account may be closed you can consider opening one of these.
The two accounts known to us which will definitely remain open during your bankruptcy are the Co-Op Cash Minder and the Barclays Basic account. They can be opened even if your credit rating is already poor.
The advantage of the Co-Op and Barclays accounts is they are free. There are other so called Managed Bank Accounts which are aimed at people with poor credit ratings. However they are not recommended as you have to pay for them.
You should open your new account before you go bankrupt. You can start to use the account straight away. This will then ensure you always have an account available.
Can you use your Partner’s Bank Account while you are Bankrupt?
You do not need to have a bank account in your own name while you are bankrupt. There is nothing to stop you using someone else’s account if they are happy for you to do this.
It is possible to have your wages and other sources of income paid into another person’s account. It is also easy to set up any regular payments you need to maintain.
It is not sensible to add your name to your partner’s account. If you do this before you go bankrupt it could put the whole account at risk. If you try to do so after you are bankrupt it may not be allowed by the bank.
Using someone else’s account is generally less convenient than having your own. In addition once you are discharged it will be less easy to start repairing your credit rating without your own bank account.
Your Bank Account options after Bankruptcy
Once your Bankruptcy is over there is nothing to stop you applying for a new bank account. You could apply for a basic account with virtually any bank.
Most high street banks offer free basic accounts for people with poor credit ratings. They may not be available while you are still bankrupt. However once you are discharged you should be able to apply.
Opening one of these free accounts will certainly be an advantage if the only account you have been able to get to date is a Managed Account that you have to pay for.
Before you can apply for a standard current account you will need to wait until your credit rating starts to improve. This may take a number of months or even years.
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