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My Bank Account After Bankruptcy

You can still get a bank account after your bankruptcy discharge. However, this will not be an ordinary account but a basic bank account.

When declaring bankruptcy, your bank account is frozen if you have an overdraft debt. Since you are dealing with a bank as your creditor, it’s unlikely that they will let you open an account considering your financial situation.

Moreover, your account is frozen, an official receiver, or an OR will have the money left in your account, which may allow you to gain access to your money if deemed necessary to compensate your essential needs.

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Will banks close my bank account when I declare bankruptcy?

Though you don’t have an existing debt with your current bank, declaring bankruptcy will automatically freeze all your bank accounts. This will take several days while an OR or an official receiver handles your transaction history and your bankruptcy check.

After such time, your banks may close all your existing accounts at once. When this happens, you may have to open a new account with other banks. In some cases, other banks will let you open an account with them for as long as it’s a basic account.

Having a bank account is essentials these days since most wages and compensation use bank to bank as a mode payment. This means, considering an option to open a new account is a must when declaring for bankruptcy. Thus, it might benefit you to open a basic account prior to getting bankrupt, to suffice your essentials needs.

What happens to my joint bank accounts?

Moreover, regardless of your bank account is a joint account; still, it’s not exempted. It will still be frozen, considering that you co-own the account.

However, the bank may take the below alternatives:

  • taking your name from the joint account and letting the other person keep it as an individual account
  • closing your account and refunding 50% of the remaining money to the other account holder

Can bankrupts open a new account?

Basic bank accounts offered by highs street banks are preferable for bankrupt individuals. The following are some suggestions that you can consider when getting a new account after bankruptcy:

  • Avoid applying for a basic account to banks where you currently have existing debt
  • Make sure you ask the bank to open a basic account and now an ordinary one
  • You must need to notify the bank that you are in current financial strife, the reason why you’re opening for a basic account. You can also tell them that you are finding an alternative account in place of your current account.
  • Be aware of the terms and conditions and check if it allows you to access and use your accounts even after going bankrupt.

When should I open for a new account?

Opening a new basic account before bankruptcy. This allows you to transfer all the money you have in your bank account, which you can use on your living costs. Even though it might still be on hold or frozen for a period of time after declaring bankruptcy.

Opening a new basic account after bankruptcy. Opening after going bankrupt is an advantage in the event that it will not be frozen, allowing you to use your funds. However, you will need to transfer your money right away to avoid missing payments on your living costs.

How can I get an ordinary account?

In most cases, banks will not allow you to get an ordinary account unless discharge from bankruptcy. So, the moment you are discharged from bankruptcy, it would be possible for you to open a new account with any bank. Normally, it takes a year for you to be discharged from bankruptcy.

You may still find it hard to open certain types of accounts. For instance, banks, where you owe debt, are likely to let you open an account. This is because banks usually conduct a credit check, where your bankruptcy records can be seen on your credit file.

Bankruptcy, therefore, has a drastic impact on your credit rating.

High Street Bank Account Options While Bankrupt

There are two options you can consider as an alternative to high street bank accounts. These options may vary in certain aspects as compared to a basic bank account and might require certain monthly charges.

Pre-paid Card Accounts

Pre-paid bank accounts can be more expensive, yet they are widely available if you are not yet discharged from bankruptcy. Most pre-paid account requires monthly fees that can amount up to £20. Besides, charges are possible when depositing or withdrawing money from the account using cash machines. This pre-paid account card can be used like a debit card.

Post Office card account

Another alternative is opening a post office card account, which can be used while you’re undischarged from bankruptcy. This is when your monthly income comes from state pension or state benefits. You can have this without charges or fees, but this is not intended for wages and other sources of income.

FREE advice from bankruptcy experts

Before you consider filing for bankruptcy, you must seek FREE DEBT ADVICE. Our team of debt experts helps you get back on your feet by putting a debt management plan together. You must need to act now before the situation becomes worst.

With our finance experts, helping you to come up with the best debt management plan, it is possible to get rid of your debt in no time.  Should you wish to speak via phone, call us at 0800 193 1024 or online.