You can have a bank account if you go Bankrupt. However you will normally need to open a basic account if you have not already got one.
Included in this article:
- Can you keep your bank account?
- How to open a new account to use when bankrupt
- List of banks providing free basic accounts
- Should you pay for an account?
- What if you need a business account?
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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? To find out more please visit: http://beatmydebt.com/bankruptcy-frequently-asked-questions/will-i-be-allowed-a-bank-account-if-i-go-bankrupt
Can you keep your Bank Account if you go Bankrupt?
There is nothing to stop you having a bank account in your own name if you go bankrupt. However most banks will not allow you to use a current account. This type of facility will be frozen whether the bank is owed money or not.
As an alternative you can open a basic account. These accounts are free and can be used during bankruptcy. They provide all the facilities you need such as a debit card and internet banking but offer no credit.
Depending on the bank you chose you can open a new basic account before you go Bankrupt. You can start using it straight away. It will remain functioning after you go through the application.
If you are already using a basic account it is likely that you will be able to continue using it after you go bankrupt. However check with the bank first.
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How to open a new Bank Account for use when Bankrupt
Many high street banks now offer basic accounts which can be used while you are bankrupt. It is therefore relatively simple to chose one which is convenient for you.
Depending on the bank you pick it is normally advisable to go into a local branch to open the account.
If you are unsure whether the account you are considering is suitable do not be afraid to ask. Explain to the bank that that you plan to go bankrupt and check the account will remain open.
Be honest and tell the bank you are planning to go bankrupt. Explain you are looking for a basic account which will remain open and they will normally be ready to help you.
List of Banks which provide Free Basic Accounts for use if you are Bankrupt
A list of banks which are known by Beat My Debt to offer basic accounts which remain open after bankruptcy is given below.
All of these banks offer their basic account for free. You will get a debit card, internet banking and be able to set up direct debits and standing orders from the account.
– Monzo (On-Line account)
– Starling (On-Line account)
– Co-Op Cash Minder Account (Must be opened before going Bankrupt)
– TSB Basic
– Nationwide Flexbasic Account
– NatWest Foundation Account
– Lloyds Basic (open after you are bankrupt)
– Halifax Basic
– HSBC Basic Account
– Santander Basic Account
– Virgin Essential Current Account
– Yorkshire Ready Cash Account
Some banks will let you open their basic account before you go bankrupt. Others will ask you open the account after you are bankrupt.
Should you pay for a Bank Account?
Some companies offer a Managed Account service. You will certainly be able to open this type of account for use after you go bankrupt.
The account is known as managed as it helps you budget. Once your income is paid in the cash you need to pay all of your regular monthly bills is moved automatically into a “bills account”.
As a result of this you should always have sufficient funds available to pay your priority expenses. However these types of accounts come with a cost. There is normally a monthly fee of £10-£20.
A Managed Account is really only beneficial if you truly struggle to manage your money. If you can organise your budget yourself it is unlikely to be worth paying for this service.
What happens to your Business Account if you go Bankrupt?
You can go bankrupt if you are self employed. However your business bank account will normally be closed given it is a current account facility.
Clearly if you want to carry on running your business having an account that you can use will be important. However most banks will be reluctant to offer you a new business account once you are bankrupt.
One way to resolve this is to open a second personal account to use for your business. 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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Hi. I have gone bankrupt. Can I open a Lifetime ISA Savings Account?
Hi Arvind
You are allowed to save while you are bankrupt as long as the money saved comes from your agreed living expenses budget.
Clearly if you get a windfall or start earning extra money, you can’t just save these extra funds. First, you need to report them to the Official Receiver.
Given the above, I would assume that you are allowed to put any money you are able to save into an ISA. You would need to speak to the relevant bank directly about whether they will open an ISA for you. If so, I do not believe it would be an issue.
Hi which bank is best for basic account after bankruptcy?
Hi Jackie
The main thing to understand is that you have to apply for a basic bank account. Basic accounts are the only accounts you will be able to open. They come with all the facilities you need (for example a debit card and internet banking) but no credit facilities.
Other than that, I can’t really say that any bank is any better than the others. I do often recommend that people go with either Monzo or Starling which are both on-line banks. This is simply because they are very easy to open (from the comfort of your own home). If you are looking at Monzo, you need to chose their standard account.
But you can go ahead and chose which ever bank you are most comfortable with. It really does not make a huge amount of difference.