Halifax and Bankruptcy

Knackeredoldbat

I've also posted this on the banking board, interesting to see if this is a new thing or not!

I declared bankruptcy in 2008, everything fine with my credit report etc now and have been merrily switching current accounts. Applied for Halifax today and although I was accepted I had to confirm at the end that I had never been bankrupt.

Obviously I couldn't do this so let the account go, but am wondering now if this will become more and more common. I knew I'd have problems with mortgages but never thought it would happen with a current account.

Any one else?

alltaken

It's not new but something that they are within their right to ask.

If you call their account opening team instead of applying online, they will not ask and it is not a term of the account being opened, basically apply over the phone and you'll be fine.

Knackeredoldbat

Thanks, I guess it just didn't occur to me that they'd ask it!

I could ring but now I've been credit checked I may have to leave it a while. Assuming it will count as 2 different searches of course!

Thanks again.

alltaken

If you phone them and explain you had an online application in progress but lost it, they will likely retrieve it via your surname and address and continue that application over the phone.

Failing that, 2 searches on your report from the same institution proceeded by a product from that institution being successfully opened will likely do your credit file no more harm than one search and an opened account.

Best of luck!

Cobalt77

2 searches on your report from the same institution at around the same time shouldn't affect you one jot.

After all, think how many times branch staff mess things up and end up doing the same thing twice by mistake? (or because they weren't aware someone else had already done it)

If this was financially detrimental to your credit rating, they would end up in all kinds of regulatory trouble.

So, I'm pretty confident you should be fine

betterdaysahead

Why do you need to select 'Yes' to the question? They have no way of checking - your 6 years are up. The only place there is still a record is in the London Gazette and even within that, there is no personally identifiable information there, just your name. Not saying you should, just that if you did, they would have no way to find out otherwise.

This kind of thing infuriates me - it's like you aren't allowed to ever move on. Even criminal convictions become spent - why in the world can't bankruptcy?!

alltaken

betterdaysahead wrote: »

Why do you need to select 'Yes' to the question? They have no way of checking - your 6 years are up. The only place there is still a record is in the London Gazette and even within that, there is no personally identifiable information there, just your name. Not saying you should, just that if you did, they would have no way to find out otherwise.

This kind of thing infuriates me - it's like you aren't allowed to ever move on. Even criminal convictions become spent - why in the world can't bankruptcy?!

I believe there is also a permanent insolvency register available to select institutions.

I agree that it is infuriating, consider this also:

A criminal conviction may be classed as spent and not need to be disclosed, UNLESS ASKED, however, a DBS check (formerly CRB check)/enhanced DBS check will show convictions if they are something that would conflict with a certain position, even when spent.

With this in mind, somebody who serves a sentence and goes through the justice system, still has to live with the association of that conviction.

Bankruptcy is very much the same and is something that you have to declare if asked, anyone can ask at anytime. It's a financial process and whilst it may not be fair that you always, even after 6 years, have to declare it, other legal processes have this consequence too.

I did just compare bankrupts with criminals but I was trying to show that even when something is done and dusted it's not done with.

We might get an EU directive that gives ex bankrupts more rights by telling financial institutions that they may not ask if EVER but more last 6 years. That would be fair, I imagine it will be the same time that past criminal convictions have no bearing after X time.

Knackeredoldbat

Exactly....

It was the 'if ever' that surprised me. I haven't been asked that on any other application.

There was no way I could lie. Apart from anything else, I've worked very hard to sort myself out and I wouldn't jeopardise that by risking a fraud marker next to my name!

I may try ringing tomorrow or I may just leave it.

Thanks for your input, much appreciated

wolfers

I've just been rejected for the Halifax account.

I earn £2,500 after tax per month. My current account balance is rarely below about £5,000. I have zero debts. Although I have two credit cards I always pay them off in full each month. I bought my car for cash out of savings for £7,500. I've just opened a Help to Buy ISA and will be paying in the maximum £200 per month. I have never missed a rent payment since I moved into this house nearly seven years ago. I've never missed any kind of bill payment.

But the computer said no. Because I went bankrupt in 2010. This kind of moronic knee-jerk decision-making by banks does my head in. Why ask for all that other information if there's only one thing you care about? And are former bankrupts all massive credit risks? (I wasn't even applying for credit. I have zero need for an overdraft.)

GazHatesBanks

wolfers wrote: »

I've just been rejected for the Halifax account.

I earn £2,500 after tax per month. My current account balance is rarely below about £5,000. I have zero debts. Although I have two credit cards I always pay them off in full each month. I bought my car for cash out of savings for £7,500. I've just opened a Help to Buy ISA and will be paying in the maximum £200 per month. I have never missed a rent payment since I moved into this house nearly seven years ago. I've never missed any kind of bill payment.

But the computer said no. Because I went bankrupt in 2010. This kind of moronic knee-jerk decision-making by banks does my head in. Why ask for all that other information if there's only one thing you care about? And are former bankrupts all massive credit risks? (I wasn't even applying for credit. I have zero need for an overdraft.)

The cynical side of me thinks that banks see ex-bankrupts in one of two ways:

1. Those that have 'learned their lesson' and never seek credit again (so they can't make their fat fees on overdrafts, etc.); or
2. Those that don't care/haven't 'learned their lesson' and will get into a mess again and leave them with an unrecoverable debt.

Seriously though, you are better off waiting until the 6 years from bankruptcy date has passed and it's off your credit files as until then you are highly unlikely to get anything other than a basic account with any institution purely because the account would let you become overdrawn even if you didn't request it.

AFAIK the basic accounts always have an online debit card (i.e. each transaction has to be verified by the card issuer so it should be impossible to go overdrawn) whereas many (if not all) of the standard accounts will have an offline debit card where authorisation is only required above certain limits so there is always a potential for the account to go overdrawn.

I'm in a similar situation where because I can't get a standard current account, I'm restricted to savings accounts that pay 1.5-2% interest rather than the 3-5% that I could otherwise get in a decent interest paying current account and knowing my luck they will all get pulled the very month I would be eligible for them!