Will I be allowed a bank account if I go Bankrupt?

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If you go Bankrupt you remain in control of your day to day financial affairs. You will be expected to continue to manage your own money and your monthly living expenses payments.

You are allowed to have a bank account to help you do this. Nevertheless it is likely that the account you are currently using will be frozen. We explain if and how you can open a new account which you will be able to use.

Can I keep the account I already have if I go Bankrupt?

Generally speaking when you declare yourself bankrupt you will need to open a new bank account. The accounts that you have been using up until the date of your bankruptcy will usually be frozen particularly if you owe them money or you have any savings accounts.

If you have an account with no overdraft facility you may be able to keep using it. However, you should check with the bank first that they would be happy to keep the account open for you. Your bank may prefer you move you on to a simple account called a card cash account.

A card cash account specifically does not offer any borrowing facilities but you can pay in wages and other income as normal, set up direct debits, standing orders and usually have a debit card

How do I open a new account if I am going Bankrupt?

The best time to open a new bank account is just before you declare yourself Bankrupt. This way you can have it up and running and start to use it so there will be no period without an account once your old accounts are frozen.

Most high street banks now offer simple bank accounts that they will be willing to keep open for you even if you go bankrupt. Two banks which seem to be particularly helpful at present are the Co-Op and Barclays.

Once you are speaking to someone at the bank, tell them that you intend to go bankrupt so they can open the right account for you.

Do you want help to go bankrupt? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts

Should I use a managed bank account?

Some companies offer a service called a managed bank account. This service can be useful if you have found it difficult to manage your money in the past.

Generally your account is split into two. Once your salary or other income is paid in, the amount you need to pay all of your know outgoings such as your rent or mortgage, council tax, utility bills and debt payments is moved automatically into a bills account.

The remaining money is made available for you to access to pay for your other living expenses such as food, clothing and petrol.

The advantage of a managed account is that you have peace of mind knowing that the money you need to pay your regular bills will always be available and you can never spend over your budget.

However, these types of accounts come with a price and normally cost £10-£20 a month. As such, a managed account is really only a benefit if you truly believe you cannot manage your money yourself.

Can I have a bank account if I am Bankrupt?

It is possible to have your own bank account if you go Bankrupt.
What happens to the account you are using now?
When and how should you open a new account?

Can I have a business bank account when I am bankrupt?

If you are self employed or running your business as a sole trader, it is possible that your business bank account will be closed if you are declared bankrupt.

This will certainly be the case if you owe money to the bank where you have your business account even in the form of an overdraft. If you do not have any debt with the bank you must still check with the bank itself to see if they will let you continue to use the account.

Clearly if you are to continue with your business, then having an account that you can use for business transactions is important. However if you have had to close your business account it may not be easy to open a new one.

One of the only banking groups who offer new business accounts to people with poor credit ratings is Lloyds banking group (including HBOS). However if you already owe money to Lloyds banking group then even this will not be an option.

The solution to the problem is therefore normally to open a second personal account and use this for your business. Clearly you will have no credit facilities. However you will be able to pay in cheques if necessary and keep your business and personal transactions separate.

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