PayPal & bankruptcy

vixg66

PayPal have just confirmed that I can't have an (effective) account with them as PayPal Credit arrears were included in my bankruptcy. I just wanted to let people know as the information isn't very clear about what happens to PayPal accounts if they are one of your creditors.

It is confusing as they haven't actually closed my normal PayPal account, they just put a hold on it saying I needed to provide an address (which they already had).

so, I can't:

• · Withdraw money from PayPal
• · Receive money or payments
• · Send money or payments
• · Refund money to customers
• · Pay using PayPal
• · Close PayPal account
• · Remove credit or debit card
• · Remove Bank Account
• · Add funds to your PayPal account

but I can:

• · Add bank account
• · Add debit or credit card
• · Update your profile
• · Display PayPal logos on site or auction
• · Convert currencies

I was looking into this as I want to put some items on ebay, but as I can't use PayPal I'm not sure how I would sort out payments? (I'm trying to simplify my life and live with less 'stuff' and not buy more 'stuff')

TheGardener

When I went BR I had a paypal account and I sold loads of things to raise the BR fees. I didn't even think about it as a bank account and didn't mention it on any of my BR forms. The OR would have known I had it as there were so many transactions on my regular bank accounts statements from paypal but they never mentioned it either.
My understanding is that Paypal don't accept BRs as account holders but with neither me nor the OR mentioning it to them - I guess they never knew and my account carried on as normal.
However, I didn't have any credit facility as such and didn't owe them any money at the point I went BR.

terrence45

If you don't have a negative balance with them, they aren't a creditor so you could keep it open. How would they ever find out about your bankruptcy unless you told them? They're no more a bank account than Transferwise, post office travel money card etc and, unless you have cash sitting with them, don't need to be involved in your bankruptcy.

Of course in your case you did tell them, so they've limited your account. I thought Paypal and Ebay were separated now and you weren't obligated to use Paypal to sell on Ebay?

vixg66

I did have a negative balance with Paypal Credit - I owed £400, so they were informed of my bankruptcy.

If I hadn't owed anything to PayPal I wouldn't have told them about the bankruptcy. My musing was that it wasn't made clear that I wouldn't be able to use PayPal at all. It would be easier if they were clear about that, rather than stating:

"A temporary limitation has been placed on your account
The cheque withdrawal you requested has been returned due to an incorrect postal address. We've credited the funds back to your account and have limited what you can do with your account pending receipt of an updated address.

We need you to take action on your account. Access to some features in your account will be limited until you've completed the required tasks and provided the information we've requested. We'll remove the limitation after we've reviewed the information you provide."

The above makes it sound like I could have resolved the issue and continued to use PayPal normally without any credit (despite the bit about a cheque withdrawal and postal address being completely false).

terrence45

I thought they were forced to accept credit and debit cards without a Paypal account now? So you could deselect it.

Can you open a new PP account? In the olden days you just needed an email address, not sure now.

Attach it to another bank account (can you open another basic one, or a Transferwise dummy one?). Transferwise you don't even have to give them your address.

dave1968

Things have changed with Paypal greatly over the past few years and buried in the T&C are all kinds of clauses as to what will happen if you are subject to BK / Insolvency Especially for Ppal business accounts


So if you have debt to ppal such as Paypal working capital or PPal credit they will limit or close your account if money owed goes into a BK This was the sole reason I fought a potential BK and won through as it would meant loss of my business PPAL account where 90% of my income is processed through.



I "presume" if its a personal PPAL account where you owe nothing to them then it would remain open to use. But Paypal like other financial institutions will do all they can to protect there assets. But you have to really dig for information especially if a business account holder. Seems like the money owed by the OP was enough for Paypal to limit the account. I have heard of limitations in such situations being lifted but always at least a year on.

soolin

Just for clarification , despite the split of eBay and PayPal it is not possible to sell on eBay without a valid PayPal account. If a buyer chooses to pay by debit or credit card then it still goes into the sellers PayPal account otherwise seller doesn't get the money!

No doubt there will be people either sending info by PM or suggesting outright that a stealth PayPal account is opened, but this will only work for a short time and once spotted any monies in it will be held for 180 days against fraud.

It is easy to spot a stealth account as once a seller is required to verify their account they will need documentation,plus a current account able to accept direct debits all of which link to the personal address of account holder. PayPal are becoming much quicker in spotting these accounts now and at least once a week on various forums sellers post about the awful,issues they have trying to get their funds after being flagged as a fraudulent account, so beware.

At some point in the future , although it has been delayed here in the U.K., eBay are launching their own integrated payment system so OP might have to wait until that happens before they can sell again on eBay.

It is also worth adding that whilst it is possible to have one of each type of PayPal account, i.e. Full business, personal and micro, being restricted or banned on one means no other account, even of a different class can be used to get round the restriction.

stevelo

I had a small amount owing on PayPal credit but I paid it off as I use PayPal regular. after reading this post I am so glad I did

morrit

I know this is an old thread, but I have also had the same issues as OP, despite it being nearly 2 years later. PayPal and Ebay are completely intertwined. I also need to sell stuff, but they refuse tk allow me access to a personal account. I can pay money in, have it paid in but not use it for ebay purposes, Ebay reject it straight away, even if I put cash on collection. Stuck in Facebook messaging boards (whilst I'm here, anyone want to buy a Welsh dresser? 😜). But in all seriousness, it's a pretty poor show considering that it's been 4 years since my BR. C'est la vie. Comforted in a way knowing its not just me though. 

SomeMadeUpName

morrit said:

I know this is an old thread, but I have also had the same issues as OP, despite it being nearly 2 years later. PayPal and Ebay are completely intertwined. I also need to sell stuff, but they refuse tk allow me access to a personal account. I can pay money in, have it paid in but not use it for ebay purposes, Ebay reject it straight away, even if I put cash on collection. Stuck in Facebook messaging boards (whilst I'm here, anyone want to buy a Welsh dresser? 😜). But in all seriousness, it's a pretty poor show considering that it's been 4 years since my BR. C'est la vie. Comforted in a way knowing its not just me though. 

Can I ask: was your Paypal account that of a sole trader? So even though it was a business account it was still you (as you were the business)?
I ask because I am a shareholder of (and director in) a ltd co business that has a Paypal account with a decent sized working capital account advance. We've been paying back for a year and so far so good even with Covid. We will be paying back for several years yet though, and with the state of the industry then who knows. When I set up the account I was very very specific with the operator (and read the T&C's carefully) to ensure the advance was to the ltd co and not me (nor guaranteed by me) despite my being the named contact and the account being linked to my (work) email.
So if anything does happens that debt can't come to me surely, nor should it effect my personal account should it?
Anyone any experience?
BTW Paypal have been very helpful and flexible with the working capital advance repayments, reducing repayment rates to allow for Covid trading conditions, the product isn't bad so long as you accept it is expensive (but unsecured business 'lending' is).

Benjamin75

I am on the same situation, went BR few months ago and PP is one of my creditors. The way I see it is, that's the end of the road for me on PP platfortm. They will not allow a BR user to close the account or open a new one. Shame because PP has been very userful for me, but hey ho.... this is my fault now. The good news is for eBay users is, eBay are building their own paymen system that is much more open and various options (including Apple Pay and Google Pay)