Bank accounts for bankrupts
All high street banks now offer basic bank accounts which are suitable for bankrupts. We recommend the following if you’re looking for a new account to use after bankruptcy:
- Don’t apply to a bank for a new basic account if you already have debts with them
- Ask the bank for a basic bank account, not a current account
- Tell the new bank that you’re opening a basic account because you have financial difficulties and you’re looking for an alternative to the account you’re using at the moment
- Make sure you ask when you open the account if the terms and conditions will allow you to continue using it after bankruptcy
Should I open a new bank account before or after I go bankrupt?
If you open a new basic account before you go bankrupt you can move all your income and your priority payments to the new account. This reduces the risk of missing any bill payments. The new account will still be frozen for a short time after your bankruptcy.
If you wait until after your bankruptcy the new account won’t be frozen and you can use it as soon as the bank opens it. However, you’ll need to move your income and bill payments over to the new account, and there’s a risk you may miss some payments to household bills if you don’t do this straight away.
When can I get an ordinary current account again?
Most banks won’t allow undischarged bankrupts to have a current account. This means once you’ve been discharged from your bankruptcy you should be able to open an account with any bank or building society. You’ll normally be discharged 12 months from the date of your bankruptcy order.
After you’re discharged from bankruptcy you may still find it difficult to open some types of bank account. For example, it’ll be very unlikely that you’ll get an account with an overdraft facility. This is because banks will credit check you, and because of your recent bankruptcy they’ll be unwilling to give you an account where you can go into debt.