Upon filing for bankruptcy your bank account will be frozen and may be closed. You will therefore need to make alternative arrangements for receiving your wages and paying bills. The good news is that you have a few options:
You may wish to consider a prepaid card such as the cashplus prepaid gold MasterCard®, which also has a credit builder to help you rebuild your credit worthiness. It has 100% guaranteed acceptance*, there are no credit checks, no bank account required and you can have your wages paid into it just like a bank account. You can also set up standing orders and direct debits. There is also no charge for bounces.
If you are trying to find a bank account for bankrupts then you may wish to consider a managed bank account. Although there is a small fee to pay they are becoming extremely popular because you are guaranteed to be accepted, even as a bankrupt. They usually have the following facilities:
These are typically available for a small monthly fee. To apply for one or to find out more go to Card One Banking.
Sadly, with a history of bankruptcy bank accounts can be difficult to find without having to pay for one. If you are looking for a free bank account as an undischarged bankrupt the you have one option detailed below. If you want to compare the different types of bank accounts for bankrupts then visit the banking facilities page.
* Please note that the basic bank account products have recently changed. From 01st January 2016 their eligibility criteria appears to have been standardised. This could be good news for bankrupts. I will post more information as it becomes available. You should of course do your own research and explore all options before getting your account.
The following are bank accounts for bankrupts that you may be accepted for if you are an undischarged bankrupt:
If you have been discharged from bankruptcy the following bank accounts may be available. Always check your credit report before applying to ensure there is nothing that can damage your application. You can get a free trial at Equifax**.
You can get a 30 day free trial of your Equifax credit report online. Go to Equifax's free trial page ** for more information.
It is important that you check your credit report before applying. Your application may be declined if it contains certain mistakes. Also, do not apply for your bank account until the bankruptcy order has been made otherwise your account may be frozen.
Credit Unions are organisations set up as a co-operative usually to benefit the community they set up in. Your local credit union may offer accounts, so it may be worth asking.
Decide which of the bankruptcy bank accounts is most suitable for you and check the accuracy of the credit report that will be checked. If you have been discharged from bankruptcy then make sure your credit report shows this. If it doesn't, automatic credit scoring may mean you get declined for the bank account.
Then contact the bank and apply. You will probably have to go to the bank with proof of ID and proof of address. You may also need to present a discharge of bankruptcy certificate.
Under the Banking Code 2005 if the lender has such an account available you should be offered a basic bank account "if you specifically ask and meet the qualifying conditions for one". It is possible that you may not be offered one and if this is the case you may be able to complain under the Banking Code.
Note: Your application is likely to be declined if you have a record of fraud.
Some accounts offer more features than others, however, you can expect no credit facilities with a bank account after bankruptcy and at most a Solo or Visa Electron card debit card. It may be possible to upgrade from a bankruptcy bank account at a later date.
You should have access to Internet banking, telephone banking, be able to make bill payments and set up direct debits.
The Financial Services Authority publishes a booklet with a list of basic bank accounts produced by the British Banking Association.
Following the bankruptcy order it is possible that your current bank may re-open your account or provide you with another. However this may take a few weeks and it is not guaranteed.
*Subject to applicant providing acceptable identification, being a UK resident, aged 18 years or older if primary cardholder, or 13 years or older if additional cardholder. The cashplus prepaid MasterCard is issued by APS Financial Ltd (AFL) pursuant to license by MasterCard International Incorporated. AFL is authorised and regulated by the Financial Services Authority. (www.fsa.gov.uk/register) Registered in England no. 06029941. Your card will be serviced by Advanced Payment Solutions Ltd (APS) which is a registered agent of AFL for this purpose. Registered in England no. 04947027. cashplus is a registered trademark of APS.
**Please note that monthly fees apply to the consumer following the 30 day Free Trial of these products if the user does not cancel within the trial period. The monthly fees are £14.95 for the Free Credit Report and Score. A user can cancel their subscription with Equifax at any time.