How bankruptcy bank accounts work
Many people may be under the misguided impression that bankruptcy means that you can’t have a bank account; however you’d be mistaken. Bank accounts for those that have gone bankrupt are known as basic bank accounts.
How bankruptcy affects your banking
Bankruptcy does affect the way you operate your finances, and, in turn, the way that you run your baking. You are only allowed a basic bank account whilst your bankruptcy still applies; this means that you won’t be allowed credit facilities such as an overdraft, or a debit card. However some basic accounts do provide you with a card to use in ATM machines.
When you declare yourself bankrupt, you may find that your current bank will no longer do business with you (this is particularly true where money is owed to said bank). In such an instance you’ll need to find a different bank.
Basic bank accounts available on the market today
Today the market must account for the million people that don’t have access to full bank accounts and it may surprise you to learn that practically every bank provides basic bank accounts. This may be little known due to the fact that many banks try to keep their basic accounts under warps, after all, they don’t make money for them, so why would they promote them?
The most widely respected basic bank accounts are that of Barclays bank and the Co-Op bank, these are known respectively as: the Barclays Basic Current Account and the Co-Op Cashminder account.
You should be aware that basic bank accounts, whilst they are free of charge, may still have charges for things such as returned direct debits and other events. Some Banks have requirement for minimum £20-£25 to open an account. However they are mostly always operable online, in addition to the traditional in person methods. This means that you can keep track of your account everyday.
How to apply for a bankruptcy bank account
When you apply for a basic bank account, you are not ran through any credit checks. To prove who you are in order to open a bankruptcy bank account, you’ll usually need one or more of the following documents:
• Full, current UK passport.
• Current UK photo card driving licence or UK full paper driving licence.
• Benefits correspondence, or benefits book.
• HMRC tax correspondence or assessment letter.
Bankruptcy needn’t mean going back to dealing only with cash. Today there are many different types of basic bank accounts, and if you run it well, at the end of your bankruptcy term, you may find that you can build up a credit history from scratch. If you’re still unsure as to what you’re options are, try talking to your local bank or booking an appointment with the Citizens Advice Bureau.