****urgent Question ****

disco_3

Have an appointment on friday at the courts to start the BR rolling.This is only to submit the papers and to go in front of the judge.

Will all bank accounts be frozen from tomorrow ?

fermi

disco wrote: »

Have an appointment on friday at the courts to start the BR rolling.This is only to submit the papers and to go in front of the judge.

Will all bank accounts be frozen from tomorrow ?

No. This is where you can get yourself into trouble.

Once the OR has received a copy of the BR order, they then write to the bank (and this can take up to 5 days). They will either tell the bank that they must freeze the account, or that they are happy for the bank to keep it open.

Until, you have formal confirmation from the OR that that it is OK to use the account, you must not touch it.

This is why reason why it is so advisable to open a new account post BR.

http://www.insolvency.gov.uk/guidanceleaflets/bankaccount/bankaccount.htm

How will bankruptcy affect my bank account?

When the bankruptcy order is made, you should:

* immediately stop using your cheque books and bank cards; and
* hand them over to the official receiver as soon as possible.

All your bank accounts are usually 'frozen' by the bank when it becomes aware of the bankruptcy order. So you will need to make alternative arrangements for receiving money into your account and paying standing orders, direct debits etc. You should not try to open a new bank account before the bankruptcy order is made, because this account will also be frozen.

Some banks may allow you to keep using your existing bank account. But even if your bank agrees to this, they will freeze the account when they first hear about the bankruptcy order.

Will I lose the money in my bank account?

Any money in your account at the date of the bankruptcy order is an asset in the bankruptcy. So it will be claimed by the official receiver or the trustee (if an insolvency practitioner has been appointed in place of the official receiver). However, the official receiver or trustee may release some money to you for necessary domestic expenses.

If the bank account is in joint names, the official receiver or trustee will decide how much of the money to release to the joint account holder.

What happens if my bank account is overdrawn?

The money owed to the bank is a debt in the bankruptcy. So you must not make any payments direct to the bank, unless it has a charge (a form of security to ensure payment of a debt, such as mortgage) on your home. If your bank account is in joint names, the bank can ask the joint account holder to pay all the money owed.

Can I open a new bank account?

After the bankruptcy order, you may open a new bank or building society account, but you should tell them that you are bankrupt. It is for the bank or building society to decide whether they will let you operate a bank account, and they may impose conditions and limits. You should not get any overdraft or credit facilities without informing the bank or building society that you are bankrupt. You must not write cheques that are likely to ‘bounce’ (be dishonoured).

As a bankrupt you might find it difficult to open a new bank or building society account. Some banks may allow you to keep using your existing bank account after they have contacted the official receiver. If not, you may wish to apply for a 'basic bank account'. Information on which banks offer basic bank accounts to bankrupts may be found on the Financial Services Authority website at https://www.fsa.gov.uk. If your income only consists of benefit payments, state pensions and/or tax credit payments you may wish to open The Post Office card account. This is a very simple account that cannot be used to receive any other payments such as Housing Benefit, occupational pension benefits or wages. The account allows you to withdraw cash free of charge at any Post Office branch. This account may suit you if you want a simple account that will not let you go overdrawn or incur any charges. No credit checks will be carried out when you open this account. Further details can be found at https://www.postoffice.co.uk

Do I need to tell the official receiver or trustee about my new bank account?

You do not need to tell your official receiver or trustee about any new bank account opened after the date of the bankruptcy order unless you are asked for that information. You do need to tell the official receiver or trustee about any money in the account that is more than you need for reasonable living expenses. The official receiver or trustee can claim the surplus amounts, via an income payments order (IPO) or an income payments agreement (IPA), to pay your creditors. Your trustee may apply to court for an IPO, which requires you to make contributions towards the bankruptcy debts from your income. The court will not make an IPO if it would leave you without enough income to meet the reasonable domestic needs of you and your family. Or you may enter into a written agreement with your trustee, called an IPA, to pay a certain amount of your income to the trustee for an agreed period. IPOs and IPAs continue for a maximum of 3 years from the date the order is made by the court or the date of the written agreement. If you fail to cooperate, the trustee may intervene in the bank account.

fermi

See this as well:

The official receiver should give notice of the bankruptcy order to;

(a) Banks

The official receiver should notify any banks where the bankrupt held an account as soon as practically possible (and certainly within 5 working days of the bankruptcy order) and should do so as soon as he/she obtains the bank's full address and account numbers. A list of bank contact details is available on Official Receiver Operations Section's (OROS) intranet site under the heading 'Banks'. If any operational difficulties are experienced with the bank contacts given, the official receiver should inform OROS.

With regards to internet and telephone bank accounts, the OR should not ask for details of the password, pin number or security information, or attempt to access the account through the internet or telephone.

Two standard letters, BANK 1 and BANK 2 are available through document production for dealing with an insolvent’s bank account. Both letters offer various options on how to deal with the account concerned.

Bank 1 notifies a bank of the bankruptcy order and should be used where the official receiver is content for the account to be closed. There are options available, accessed via pop-ups on document production, to cover the following circumstances: -

* Where there is a credit balance, asking for the balance to be remitted to the official receiver.
* Where no further information is required from the bank.
* Where there are further standard questions requiring an answer.

Bank 2 is available for use in cases where the official receiver is content for the bankrupt to continue to use the account, subject to bank policy. It is most likely that this will occur when the bankrupt's regular income is paid into the account concerned. There are options available to tailor this letter: -

* Where there is a credit balance on the account but the official receiver is happy for the funds to be released to the bankrupt.
* Where there is a credit balance on the account and the official receiver requires all, or part of the balance remitted to him/her.

Where the official receiver is realising a credit balance on a bank account, he/she should take a practical approach. The cost of the efforts made should not be more than the amount realised. If the balance (or sum of balances with one bank) which the official receiver is seeking to realise is £50 or less, BANK 1 should be sent asking for the balance, perhaps a telephone call to follow up and then no more than one further follow-up letter. Where the amount to be realised exceeds £50, the official receiver should use his/her discretion as to the effort required from his/her staff.

disco_3

The problem she has her Income support and Child benefit being payed into this new account next monday and tuesday, her only means of income. Also all her D/D are now going to come out of this account, Will she be able to explain this tomorrow.

If they freeze this or she is not allowed to use it then no income what so ever after tomorrow.. Panic is setting in now..

fermi

No need to panic

Can you re-schedule the court date until after the benefits have been payed?

From:http://www.debtquestions.co.uk/debt_forum/viewtopic.php?t=9905

Benefit Payments into bank accounts

If you recieve benefit payments into your bank account, then is it possible that once you are bankrupt the bank will not allow you access to the payments until they have had written confirmation from the OR that the account is of no interest to the OR, and this can take a couple of weeks.

About a month before going bankrupt, you can either open post office benefit account or arrange for the payments to be made by giro for a few weeks (DWP will do this and you can tell them why)

You need to do this about a month before your bankrptcy date if you can

and

Bankruptcy and Bank Accounts.

Once you are declared bankrupt

Once you have been declared bankrupt, ALL accounts belong to the OR, so if you draw money out then you are committing an offence under the IA86.

The OR will inform the bank (or building society) if he has any interest in the account, until he has informed them the accounts belong to the OR not you:

If the OR has an interest in an account

If he has and you attempt to use the account you will be committing a criminal offence.

It is highly possible that the account will show on line as being fully operational, and it may be that it is, but if you use it then you are in deep poo-poo.

The majority of the time the account will be ‘frozen’ that is you can pay money in but can’t take any money out.

If this has happened and you have had benefits paid in then you must obtain written authority from the OR to ‘ask’ for this money back from the bank, some will, some will fight you like hell.

The majority off account s the OR has interest in are those in debt and those with money in

If the OR hasn’t any interest in your account

First things first – he OR wont tell you unless you specifically ask!!

If the OR notifies the bank or Building society that he has no interest in the account, then the account is released back to the bank, NOT YOU.

Depending on the terms and conditions of the account will depend on if you are allowed to keep the account, only the bank will be able to tell you.

MOST banks and building societies stipulate in their T&C’s that they will not provide banking facilities, unfortunately most banks are slow to carry out these processes, so it is again possible that the account shows as being fully operational, which very often means the account will show as being fully active, when in reality it is not!

disco_3

Thanks Fermi once again.

Its not possible to delay this because she telephoned the courts this morning and they offered a date being 31st of May. This could not been done as she is due, maybe in the next week to 10 days to go back in to hospital for major surgery. She will then be unable to even go to the courts for up to 3 months.

During that time a barrage of letters and phone calls will be received and its not really what she would want after being in hospital.

This is going to be a tricky one, hopefully explaining and a bit of luck then the OR and the bank will leave the account open, Thats what is hoped for anyway.

disco_3

Thanks Blind-as-a-bat. Lets hope they are just as willing with my friend tomorrow.

Will let you all know and keep you all posted with everything as we do appreciate the help on this forum.
Its all been a bit quick because of the hospital..

fermi

disco wrote: »

Thanks Blind-as-a-bat. Lets hope they are just as willing with my friend tomorrow.

Will let you all know and keep you all posted with everything as we do appreciate the help on this forum.
Its all been a bit quick because of the hospital..

Why wait till tomorrow. Phone them up and ask.

allofadither

disco wrote: »

Have an appointment on friday at the courts to start the BR rolling.This is only to submit the papers and to go in front of the judge.

Will all bank accounts be frozen from tomorrow ?

I don't know if this helps your friend disco, but I opened a basic account just before BR and the OR told me immediately that she would ask the bank NOT to freeze it...and they didn't.

If that's her only source of income the OR won't want to make things any more difficult, but banks can be unpredictable. My account is with Barclays and they have been fine.

Wishing you friend gud luk disco.

disco_3

Phone them up and ask ?

who do you mean, The bank, The court or Both..

gettingitsorted

Hi disco ,the clerk at the court asked me whether any of the accounts on my forms were basic ones i replied yes and she highlighted the account and wrote basic across it mine is with the coop and its never been frozen,i think the main thing to do is to telephone the bank and ask them what there procedures are on bankrupts as its not the OR that freezes the account its the bank