Bank account options whilst insolvent - Guide

alltaken

I have seen many threads lately, all with one thing in common, a shared lack of understanding of bank account options available to a bankrupt. It can be confusing, especially when taking into account a bank that is involved in your bankruptcy.

Below are some of the more highlighted options. All are basic accounts and available before, during and after bankruptcy.

• Nationwide Flexbasic
• Lloyds Bank
• HSBC Basic
• Yorkshire Readycash
• Barclays Basic
• Halifax Basic
• Virgin Money Basic

The above accounts can all be opened whilst undischarged. The top four listed include access to Apple pay (unessential of course, but showing of features available)

I'll update at some point with details of banking services offered whilst undischarged.

A4445

The CO OP cashminder offers Apple Pay, however I didn't find them very good they wouldn't even give me so much as a savings account.

alltaken

Co-Op Cashminder is only an option pre-bankruptcy. I might add in a later option about opening accounts before but in my eyes, personally, they are a poorer choice nowadays considering the above list accept people at all stages, unlike the Co-Op account.

TheGardener

It might be useful to reference the role Credit Unions can play. Some of the larger ones (South West Uk and large employers) do operate current style accounts and one of the issues faced by many BR's is the lack of access to savings accounts. CU's can meet this need if a CU is available.

Although there are many BR's who have accessed accounts though all the banks you list - equally, there are others who have not. Barclays Basic however, does have a strong track record of opening basic accounts for anyone even after BR - I don't recall anyone posting who was not able to open a Barclays basic so I believe that gives it an advantage over some in that respect.

alltaken

Thanks, that's really helpful.

With the 2015 Treasury agreement it changed the way banks accommodate former debtors. I have not seen a single example of somebody being refused one of the 'new deal' basic accounts, other than those with a history of fraud. Many might also forget to include banking details for other accounts when declaring bankruptcy. The banks that don't get notification from the OR of no interest, might stop further applications.

The above bank accounts offered during insolvency are accepting of former debtors, I have real experience here; a great deal of time and complaints when the treasury deal was ratified lead me to researching which accounts truly follow the agreement in full.

I have seen one report of Lloyds refusing a new basic bank account to a bankrupt, allegedly due to the applicant having bankruptcy debt from within the banking group. I would cast doubt on that scenario as it doesn't ring true with the majority of examples (many say they have opened an account with a former creditor with the new basic account options).

The banks themselves also agree that those with former debts owing will not be excluded, the accounts are designed to help people of all backgrounds gain access to basic banking services, more so than the pre 2015 options.

Only proof of an account elsewhere that is not at threat and is disclosed when applying (or is visible to the bank when performing a credit/identity check) is enough to halt the application process, most basic accounts are offered on a basis of necessity, explaining to the bank that your 'other' account is at risk, or relations have broken down is often enough to bypass that stipulation. If you are not bankrupt and qualify for a current account instead the bank can also refuse, some providers of the new deal accounts run credit checks to see if you are eligible for only a basic account, by ruling out access to more mainstream accounts.

Fraud and proof of a newly opened basic account elsewhere are the only real excluding factors for insolvent applicants.

Accounts only offered outside of insolvency such as Natwest Foundation or Co-Op Cashminder may have different criteria.

NotEvanAPot

I will dig out the letter(s) of clarification, redact person information, and post up here, it may be with the better half however as most BR-related paperwork is archived now.

Lloyds were happy to see a customer that spent many years putting £10k or more per month through the account. It states as I posted elsewhere on MSE (I'm sure you can understand a former solicitor asking for documented evidence of a verbal meeting).

My choice of Virgin Money was taken with proximity in mind, but they have been fantastic. Sadly no contactless card, online banking or Apple Pay, but I cannot say I feel like I am missing out on anything.

london1973

I think I am going to go for Barclays, need to get on with it and concerned if I downgrade to lloyds basic before my current lloyds account is formally closed (which still hasn't happened 1 month later) they will just close the basic account instead,

Can I be as near to 100% certain as possible that Barclays won't swipe any funds of mine given I had 30k barclaycard in my BR- note this is h.unlikely and prob illegal but nothing seems to be impossible in BR

Also, lazy to ask as usual, but does Barclays basic offer online and contactless and is BASIC splattered all over their card-want to avoid obvious giveaways in a professional environment!

alltaken

Why guess? Make Barclays aware that you're currently insolvent before even applying. Let them know that you have previous debt with them and have them confirm everything to you for peace of mind.

Contactless is available. Sometimes a non-contactless is provided but you can request a contactless variant without issue. Visa Debit card does not state account type but is lighter in colour. If bothered you can plaster a picture on to a personalised card via the online service.

Telephone and mobile banking are not offered in most cases with Barclays. Few have gained access before solvent again, but the official stance from Barclays is no to telephone and mobile banking service.

Online banking
Visa Debit Card
Contactless upon request

london1973

mmm, personalised card sounds fun, is that a Barclays thing?

i will ask, but noting a previous comment on the forum, to NEVER NEVER trust what bank staff say re BR, i'm not sure its going to give me 100% comfort

alltaken

Insolvency team have a customer facing department via Barclays telephone number. I had a business bank account with Barclays in my bankruptcy, no problem retaining my basic account and opening another. You'll see that others have similar experience with the banks listed above.

System

london1973 wrote: »

and is BASIC splattered all over their card-want to avoid obvious giveaways in a professional environment!

This bothered me too, but I use Apple Pay a lot and am also going to use a Monzo card so I'm just going to suck it up with the card I'm getting having 'basic' on it for now.