Clearing my bank account if declared BR

desperatedad wrote:

This interests me too as I'm considering bankruptcy.

If you have monthly DD's going out your account to pay your mortgage and the like and at the time of bankruptcy not all these payments have come out and the account has money in it, what happens then?

If it gets included in the BR your going to fail to make important payments like the mortgage, bills, council tax, etc.

Even assuming I set up a basic account and get my wages paid into there before going BR, with the OR look at the basic account, see money in it and take it in the BR?

Sorry for the slight hijack, but I believe it is on topic...

Regards
DD

Hi desperatedad,

It's nothing to worry about, there's a couple of approaches that seem to work. The formal approach is to do nothing and then when you have yr interview with the O.R he/she will ensure that you have sufficient funds to meet your essential payments and will instruct the bank to release the funds to you. The only problem with this is if you have other borrowings with the bank, ie credit cards or an overdraft on the account then it's extermely unlikely that the bank will release those funds to you. Remember, it's the bank that freezes the account not the O.R.

The safer route is to ensure that there are no funds in the account on the day you're declared bankrupt so that you have a cash reserve and then when the court declares you bankrupt open one of the basic accounts, pay the cash in and contact all the organisations that are paid by DD to send you new mandates; chances are they will anyway if they're unable to take a DD.

One thing you have to be careful of though, especially if you have debts with yr current bank is yr salary being paid just before yr declared bankrupt and the bank refusing to allow you access to them. You can get around this by having yr salary paid into a friends or relatives account in plenty of time.

Hope this helps but please feel free to contact me if I've missed anything.

Rich