CCCS Just Advised me to go bankrupt

owetoomuch

CCCS advised opening another account as the majority of my debts are with my current bank and they will take all my monies towards their debts that is why I had to send letter of first right of appropriation for this month, so that they couldn't take all my salary this month.

CCCS said that the OR would freeze my account only for a few days if it was a basic account to make sure that I wasn't transferring funds that could pay my creditors.

As you can see I am totally confused

Remmer

It depends on the OR you deal with. Some do, some dont. Purely as a precaution I stand by my previous post

wherediditallgo

I see your confusion. As I understand it, it's not the OR who freezes the account. The OR tells the bank that you've gone BR, & it's the bank who make the decision about whether to freeze it, close it or do nothing at all. One of my banks hasn't done anything about the accounts I've got with it, though it's 6 weeks since I went BR, so I rang them tonight to ask for a letter confirming it's still OK for me to use them.

Some banks do only freeze your account for a few days, to give them a chance to properly examine it too & see if you owe them money elsewhere, & the OR may ask them for details of transactions on that account going back a year or more. Some will unfreeze the account if the OR sends the "No Objection" letter to them. However, some won't. Alliance & Leicester didn't pay a blind bit of attention to that in my case.

Remmer

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!

After you have been discharged

This is when the majority of us will see changes, these account suddenly vanish from you account details, as they are no longer classed as being in debt and the bank no longer holds them open for inspection by the OR

Who can a bankrupt open an account with

The following are listed with the FSA as allowing un-discharged bankrupts to have accounts (or rather to open accounts):

Nationwide Building Society (Basic Flex Account)
Co-operative Bank (Cash Minder Account)
Barclays (Cash Card Account)

You can apply to open any of the above accounts immedialty after you have been declared bankrupt, there is no need to wait for permission from the Offical Reciever.

All other basic account stipulates that you must be discharged from bankruptcy, and then they will look at you on a case by case basis!!

To see te full list of basic accounts, please clink on the link below:

http://www.moneymadeclear.fsa.gov.uk/pdfs/bank_accounts.pdf

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

Payments out of your account (Direct Debits, Standing Orders, etc

Make sure you cancel these with your bank before going bankrupt, and it is better if you cancel them in writing (rather than by phone or over the internet), as there have been a few cases where the bankrupt has been held liable for payment taken from an account after the bankruptcy date.

You need to aim to do this 10 - 14 day before your bankruptcy date to allow time for the bank to get their act together and stop them.

owetoomuch

Remmer

Thanks for the reply, even more confused now, why then did the CCCS advise me to open a new account?

Remmer

Because sometimes you get away with it other times you don't. It's the human factor. I erred on the side of caution and had no problems. Only you can make that decision. Good luck

jobby_2

Wow Remmer that was detailed,

What I'm still unsure about and I've been through it and gone bankrupt - is what to do if a lot of the debt is to the bank how do you stop them just taking their cut

We opened a coop account - current initially - and transferred all pay into that account - that gave us control and time to plan the next bit, we also - probably not ethically and I cringe as I type this - withdrew as much cash as possible from our old account then just stopped using it.

Will probably get shot down in flames but that's how it was

Then after BR, transferred current into cashminder - it worked for us

Maybe not the best idea

Remmer

It worked for you so don't worry. The thing is, after BR you have no control over your accounts. From the moment of BR (and that is why the judge puts a time on it) they all belong to the OR and if he has no interest in them, he tells the bank and not you. What the bank does is purely up to them and if they can get a few quid back they will!
Just to re-iterate, the safe way is to open the new basic account after the deed is done