Keeping current accounts after Bankruptcy

oliviaolivia12345

I am going bankrupt on Wednesday for about £11,000.

I have a graduate account at Natwest with £2,000 overdraft (currently at -£1,800) into which I pay all my money into and use for all my bills.

Is it ever possible to negotiate with Natwest that I keep the account as a basic current account (with no overdraft) after my bankruptcy so save me the hassle of redirecting all my direct debits and my tax credits?

fermi

It is Natwest's policy not to offer even a basic account to an undischarged bankrupt. This means that it is very unlikely that you will be allowed to keep the account open. Individuals at the bank may tell you that it will be OK, but it is company policy to close all accounts belonging to undischarged bankrupts.

See the recent thread here where despite agreement from branch staff, the account was eventually closed two months down the line:

http://forums.moneysavingexpert.com/showthread.html?t=503628

It is strongly advisable to open one of the three accounts given in whereditiallgo's sticky here, immediately after your bankruptcy while informing the bank of your BR.

http://forums.moneysavingexpert.com/showthread.html?t=474254

This may be inconvenient with regards to continuing payments and DD's etc, but it is the only way to ensure that an account won't be closed somewhere further down the line because of your BR. Some banks have even been known to go back on written assurances, so don't trust them.

oliviaolivia12345

Yes I just read that post... what a pain.

Will the bank freeze all the money that I currently have left in there if I don't take it out now?

I have previously been advised not to open a basic account until after my BR, but if it can take up to 4 weeks, I may be left stranded without a bank account. Could I open it now?

NekoZombie

Fermi's put that in very clear simple terms.

uther_2

I opened a Nationwide basic 'flex' account the day after Br,and walked out of the branch with the account details so I could set up DD's and Tax Credits etc.I would take no chances with Natwest .

NekoZombie

Can you not time your BR to coincide with after you get paid? That's what I did; I went BR on 27th, emptied my accounts as I had just been paid (the whole week before my BR I withdrew £250 a day out of the autoteller), and that gave me nearly a whole month to get a new account in place.

To be fair, I never expected to stay with my bank. I'd just stiffed them for 16k, and I didn't think they were going to welcome me back with open arms.

oliviaolivia12345

Does that mean they WILL take any money left in the account regardless of it being needed for my living expenses?!

That seems like a better plan Nekozombie. Bt it means waiting until about 5 August to go BR and I am almost at breaking point now with the phone calls and stress etc.

fermi

oliviaolivia12345 wrote: »

Does that mean they WILL take any money left in the account regardless of it being needed for my living expenses?!

Once you go BR the account then belongs to the Official Receiver. Unless given leave by the OR, you are no longer permitted to use it. Don't leave a positive balance, especially if you need the money for living.

Because of this it is best to make sure that any reasonable funds for living expenses are withdrawn before BR, as access to the account cannot be guaranteed afterwards.

As said, although it is a pain practically, it is best to walk straight out of court and into somewhere like Nationwide to open a fresh account.

NekoZombie

Did you not mention you're in your overdraft to the tune of £1,800. I may be wrong, but I assume when you get paid it won't clear the O/D in full? Natwest would be within their rights to keep your wages against your outstanding debt with them. Make sure you withdraw everything before you go bankrupt or you will not see it again.

oliviaolivia12345

Yes that is correct, but I thought the OR was able to retain funds for your living expenses? I suppose it is best to wait in that case.

nicky7175

I went bankrupt last week I opened a nationwide flex acoount before going bankrupt for my benefits and rent to be paid, I thought naybe it might be shut down. But I recieved a letter from nationwide this morning to say they are keeping the account for me