What bank account to have when going BR

ClaireLR

And when should you open it, i.e. before going BR or after, and if after how long after?

Now I know about the Co-Op cashminder account, a lot of people on MSE seem to favour that one, any particular reason for this? what other accounts can you have if you are BR and what are the pros and cons??

allofadither

ClaireLR wrote: »

And when should you open it, i.e. before going BR or after, and if after how long after?

Now I know about the Co-Op cashminder account, a lot of people on MSE seem to favour that one, any particular reason for this? what other accounts can you have if you are BR and what are the pros and cons??

The first question always provokes a debate...I opened mine pre BR without any problems but others on here recomend post BR. I think it has to be your individual choice unless there are firm rules in place....fermi probably knows.

I have a Barclays basic account. Couldn't go for the Co-op as they were a creditor. Nationwide has been mentioned as well. As far as I'm aware a BR is only allowed a basic account, no cheque books or OD.

fermi

The problem is that there are no firm rules, hence all the confusion.

For an account to be left open both the bank and the OR have to agree to it.

The OR:

They will write to the bank to inform them that you are bankrupt.
They will either request that the account is frozen/closed, or they will say that they are happy for it to remain open. However, if they have no interest in the account they cannot instruct the bank to leave it open.
The OR is most likely to have 'no interest' in a basic account with a zero or small positive balance at the time of BR.
In short there are no guarantees, but you can stack the cards in your favour.

The bank:

Even if your account is in credit, the bank is likely to close it if you owe them (or their partners/subsidiaries etc) money elsewhere. They will do this [strike]out of spite[/strike] on principle.
It is also the policy of some banks/branches/employees to automatically close the accounts of bankrupts, even basic ones.
They also do not always keep a promise to leave an account open, even if they said this before BR.
However, the accounts most likely not to suffer this fate are the basic ones that can be opened post BR. In other words, since these banks are happy for you to open these post BR, they are normally not concerned when you do go bankrupt.

To compare the basic accounts, and to see whether a bankrupt can open one see the last page of:

http://www.fsa.gov.uk/pubs/public/bank_account.pdf

But the Co-op Cashminder is the only one a BR can get which has a debit card (VISA/Electron)

Also bear in mind that a bank could find out you are BR before they get the letter from the OR to say it is OK to leave it open. This means you could have the account temporarily frozen, and unable to make essential payments/withdrawals. I've seen people write how they got caught out like this.

All this boils down to the fact that the only totally safe course of action is open your basic account post BR.

Two other good bits of info to read are:

What will happen to my bank account?
http://www.insolvency.gov.uk/guidanceleaflets/bankaccount/bankaccount.htm

Bankruptcy and Bank accounts:
http://www.debtquestions.co.uk/debt_forum/viewtopic.php?t=9905

Red1708

I had a Barclays basic account before I even contemplated BR, I had read that it may be closed so on BR day I went into the branch & contacted them by telephone to inform them. I also applied for a Co-op cashminder account on the same day. I got to keep both accounts but do now use the Co-op account on a daily basis.

A word of warning though.....the Co-op account will take a minimum of three weeks to open so regardless of when you decide to open your account if you are going to apply for a Co-op account please make sure that you have alternative plans in place for a month or so

Bakeybadoo

We applied for a Co-Op Cashminder but as the above poster said, they can take a while to process the application so in the meantime, we got one with Barclays, incase it didn't come through.

We did it pre-BR, we were actually just looking to change from Abbey, we had no firm plans to go BR but were just claiming our bank charges back.

We have been allowed to keep both open after BR but only use the Co-Op one as it has an Electron card.

ClaireLR

Thanks for all the posts so far, I wasnt aware that Co-op would be the only one that offers a debit card, and I also didnt know how long it would take for this account to be opened which has helped a lot, Ill probably go for one of these accounts and as red said, make alternative arrangements for the first month.

It does seem strange that there are no hard and fast rules over when you should open the bank account, it would help if all OR's/banks had guidelines on this that were adhered to.

Just wondered, does anyone know if its ok to have your salary paid into someone elses bank account for the first month while a new bank account is sorted out??

Red1708

Yes, if you have somebody who you an trust then defo get your wages paid into their account so that you can have a bit of breathing space to get everything sorted.