Best Basic Bank Account For Bankrupts
If you've previously been made bankrupt and are trying to rebuild your finances, the first thing you'll need to do is to open a basic bank account.
Of course, it's easy with a good credit rating as the banks check against your credit report but what options do you have available after bankruptcy?
Bank Accounts When Bankrupt
The problem with going into bankruptcy is that all your assets immediately become frozen including your previous bank account. Your credit report would have taken a battering, and the majority of banks will refuse applications for new accounts if you've been bankrupt or have a conviction for fraud, so what can you do? We list the types of accounts that are available below.
Be aware that your financial situation would not be like the one you had before and you'll only be offered a basic bank account perhaps with just a debit card and no internet banking.
After you have been discharged from bankruptcy and have a history of good credit, you should then apply to have your account upgraded to get credit cards and cheque books etc..
Basic Bank Accounts
Most accounts you can open during or after bankruptcy are called basic bank accounts which mean they are basic in their nature and don't offer all the facilities of a standard current account.
It does mean however that generally you can pay in your wages or salary from your employer, set up standing orders and direct debits, pay in other cheques and take out money with a card. Some banks offer Visa debit cards for purchases but many do not. With this basic account you'll unlikely receive a cheque book or have access to internet or telephone banking services.
Undischarged Bankrupt Bank Accounts
If you're an undischarged bankrupt, then you may have trouble in getting even a basic bank account as the banks don't want to take on the risk that you may go down the same route again. There are a couple accounts you can apply for that provide the most basic banking facilities. These include a Visa Debit or Electron Card, direct debits and standing orders, a cheque book and access to a high street banking network.
Banks offering undischarged bankrupts accounts at the time of writing
- HSBC - speak to your local branch (basic account).
- Cooperative Bank Cashminder account with Visa Electron card and no monthly fee.
- Nationwide FlexAccount.
- Barclays CashCard Account (no credit checks).
There are hefty charges if you have to default on standing orders or direct debits up to £40.
Other bank accounts are available to undischarged bankrupts but do not have the Visa debit card which after all is how we purchase the majority of our goods and services these days. But if you have been refused an account elsewhere you might like to try to apply to the following banks below under discharged bankrupts accounts.
Discharged Bankrupts Bank Accounts
OOnce you have discharged your bankruptcy, you have more options available to you for bank accounts. Some will be able to provide you with a debit card, most likely an Electron Visa debit card but ask what they will provide beforehand.
- All the basic bank accounts listed above under "undischarged bankrupts".
- Halifax easy cash account with an Electron card.
- Yorkshire Bank.
- ThinkBanking with a £12.50 monthly charge.
Other banks You Can Try
- Bank of Scotland Easycash account with no minimum opening balance.
- Pay as you go credit cards and pay your salary into them to maintain the balance.
Opening Your Account
Some banks do not apply for a credit check when opening these accounts but you need to take some form of identification. You'll need to prove who you are and where you live and need at least one of the following (check your bank on the exact requirements).
To Prove Who You Are
- Full passport.
- European Union (EU) national ID card.
- UK Photocard driving licence or UK full paper licence.
- Department of Work and Pensions (DWP) benefit entitlement letter.
- Her Majesty's Revenues and Customs (HMRC) letter with a National Insurance Card.
- Housing or Council tax benefit letter.
To Prove Where You Live
- Utility bill (gas, electricity, water, landline telephone).
- Current year council tax bill.
- DWP benefit entitlement letter.
- HMRC letter.
- Television license.
- Housing or Council tax benefit letter.
All letters and bills must have a date within the past three months.
Other Financial Options
You may be able to manage your life without a bank account by using a building society savings type of account and deposit your wages in that and set up some standing orders and direct debits. Of course, you can never go overdrawn or easily get loans but you will begin to develop a credit history again. There are also debit type pre-paid cards where you can load cash on and then use the card like cash.
If you have any requirements or questions on basic banks accounts for bankrupts, then please do write on our blog and we'll see if we can help you.