bankruptcy and using old credit card 24 June 2020 at 10:13AM in Bankruptcy & Living With It 8 replies 352 views

shiwen55

Hi,
I was declared bankrupt, well, accounts frozen then I can use my debit card for salary, etc. I had two credit cards from Lloyds and Nationwide with nill balance, still showing when login to their online site. I called Lloyds this morning if I could use my credit card again and the lady said it's been referred and the bankruptcy department is closed now because of COVID.
So, my question is if the Official Receiver has no interest in assets, cards, etc. can I still use my credit card? Or it will close automatically and what it means to be referred? Thank you
Regards,

fatbelly

I presume it means that they've spotted that you are bankrupt and frozen your card.

sammy32683

They will very likely close your account. Don't spend on it and wait until you've spoken to someone and they have confirmed if it is being closed. I would be surprised if they allowed you to keep it. 

cymruchris

Are you still in your bankruptcy period? If so, then it's immensely unlikely you'll be able to use them. The big banks don't offer credit to people immediately after bankruptcy (at least I've never heard of a case where they do) - and your first credit card once discharged after 12 months would likely be with a credit building card such as Vanquis or Aqua with very high APR's. If you're still only just into your bankruptcy it may be the OR is still communicating with all your account holders to get them closed down. Give us a bit more detail as to when you went bankrupt - and we might be able to help a bit more.

shiwen55

cymruchris said:

Are you still in your bankruptcy period? If so, then it's immensely unlikely you'll be able to use them. The big banks don't offer credit to people immediately after bankruptcy (at least I've never heard of a case where they do) - and your first credit card once discharged after 12 months would likely be with a credit building card such as Vanquis or Aqua with very high APR's. If you're still only just into your bankruptcy it may be the OR is still communicating with all your account holders to get them closed down. Give us a bit more detail as to when you went bankrupt - and we might be able to help a bit more.

April this year I went bankrupt, about two and half months

cymruchris

shiwen55 said:

cymruchris said:

Are you still in your bankruptcy period? If so, then it's immensely unlikely you'll be able to use them. The big banks don't offer credit to people immediately after bankruptcy (at least I've never heard of a case where they do) - and your first credit card once discharged after 12 months would likely be with a credit building card such as Vanquis or Aqua with very high APR's. If you're still only just into your bankruptcy it may be the OR is still communicating with all your account holders to get them closed down. Give us a bit more detail as to when you went bankrupt - and we might be able to help a bit more.

April this year I went bankrupt, about two and half months

Then I imagine with all that's been happening in the world recently - it's just a case of timing, and in due course the accounts will close. Certainly don't try spending anything on the cards, especially as it's against the law to take more than £500 in credit during bankruptcy if you've not informed the lender yourself first. (I think this is put into place to stop bankrupts going out and getting more credit before the OR has the ability to get everything tidied up, recorded and closed down). It is possible if the bank permits it, that you can continue to use your current account and debit card - but there is a possibility that might go as well. Have you opened a basic bank account just in case this happens?

mwarby

sammy32683 said:

They will very likely close your account. Don't spend on it and wait until you've spoken to someone and they have confirmed if it is being closed. I would be surprised if they allowed you to keep it. 

I would also add that if you were in debt on this card(or balance wasn’t 0) I wouldn’t use it at all, even if someone says it wasn’t being closed. Perhaps if still open several months post discharge and they confirm it’s ok. 

As others have said it’s very unlikely (imho as likely as winning lottery) a high street bank would intentionally keep a card open during bankruptcy. For most they would need at least 6 years from date of discharge to consider you

shiwen55

cymruchris said:

shiwen55 said:

cymruchris said:

Are you still in your bankruptcy period? If so, then it's immensely unlikely you'll be able to use them. The big banks don't offer credit to people immediately after bankruptcy (at least I've never heard of a case where they do) - and your first credit card once discharged after 12 months would likely be with a credit building card such as Vanquis or Aqua with very high APR's. If you're still only just into your bankruptcy it may be the OR is still communicating with all your account holders to get them closed down. Give us a bit more detail as to when you went bankrupt - and we might be able to help a bit more.

April this year I went bankrupt, about two and half months

Then I imagine with all that's been happening in the world recently - it's just a case of timing, and in due course the accounts will close. Certainly don't try spending anything on the cards, especially as it's against the law to take more than £500 in credit during bankruptcy if you've not informed the lender yourself first. (I think this is put into place to stop bankrupts going out and getting more credit before the OR has the ability to get everything tidied up, recorded and closed down). It is possible if the bank permits it, that you can continue to use your current account and debit card - but there is a possibility that might go as well. Have you opened a basic bank account just in case this happens?

OR have been informed about all cards, yes, I managed to open a Basic Account before going bankrupt as advised by Step Change. It was frozen for a week but I can use that now for salary etc. Thanks

RAS

Good. Do you have an IPA to pay?  
Otherwise it might be a good idea to see if you can open a savings account and put aside a little bit to create an emergency fund to cover things like being off work. Standing Order shortly after you get paid. 
Even a tenner would be a good idea but more is better.
It'd also allow you to budget for bigger purchases.