Can you have a bank account if you are made bankrupt?

1 June2011

Bankruptcy could help you to put an end to your problems with debt, but as a debt adviser will tell you, there are various downsides. One of the main disadvantages is the impact it will have on your credit rating.

A bad credit rating doesn`t just make borrowing money more difficult. It can make it more difficult to get hold of various financial products and services - and that includes some bank accounts.

The current accounts you see advertised on the High Street are subject to credit checks, and if you`ve been made bankrupt in the past, this can make it much harder to open a bank account.

So what do you do in this situation? Thankfully, there are a number of bank accounts available for people in your situation.

Basic bank accounts

Basic bank accounts are provided by the majority of banks and building societies. They are aimed at people who may struggle to get a current account - often including people who have been made bankrupt.

Having said that, not every basic bank account will necessarily be available to you - many of them may decline your application if you`re an undischarged bankrupt (if your bankruptcy is still in progress, in other words).

Basic bank accounts provide the account holder with basic banking facilities - an account in which to keep their money, a debit card or cashcard, and a Direct Debit/standing order facility for paying bills. In many cases, they won`t pay interest or offer a credit facility, however.

Using your basic bank account carefully should help you to improve your credit rating over time, and you may want to consider applying for a current account later on.

Other options

There are some bank accounts for bankrupts that offer more than the `average` basic bank account. Some may offer additional benefits - such as the personalised budgeting service that comes with the thinkbanking account.

This account is open to anyone who can prove they`re a UK resident and 18 or over. There is a one-off set-up fee and a monthly management fee.

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Tags: bankruptcy, credit rating, bank account, bankrupt, getting a bank account, open a bank account

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