Bank Account Confusion

Katiek22

Hello, my brother is looking to become bankrupt but we're a little bit confused about how to manage the bank account situation. 
He has a current account with Natwest which has a fully utilised £2000 overdraft which his salary gets paid into. He also has a Basic Co-op Account with £50 in it.

When he takes the step should he arrange to get his salary paid into the basic account? He believes his accounts will both be closed down/frozen leaving him without any money to live on which I can't believe would be the case? Can you advise please?  He has spoken with Stepchange but is still confused on this point. Thank you

fatbelly

Yes, switch all the income and essential d/ds to the Co-Op account.

Walk away from Nat West and the overdraft gets dealt with by the bankruptcy.

On the application form you tick 'main account' against the Co-Op one and it should be left untouched.

I assume brother has a lot of debt and stepchange have discounted the other options like DRO and debt management plan.

RAS

Don't "switch", as that moves all the DDs set to pay debts as well.

He needs to talk HR about timing the transfer of his pay to the Co-op account, and get his suppliers to transfer to the account once HR have confirmed they can action the move.

sourcrates

These things require pre-planning beforehand, he can walkaway from the Natwest account as soon as he likes, as soon as all his banking has been swapped over to the Coop.

Also it`s best practice to have an amount of cash available just in case anything should happen that means all his accounts get frozen, it can happen some times.

The better prepared he can be the better.

fatbelly

Withdraw cash from the old account.

When i said essential direct debits i meant rent, car insurance, utilities, not any debts.

Council tax for the rest of the year will be covered by the bsnkruptcy

https://debtcamel.co.uk/taxes-bankruptcy/

As will any money owing to electricity, water, gas

dave3dtg

As has been said...timing is everything. He needs to let his employer know what is happening so they understand why his bank account is possibly changing twice.
Get his wages paid into Co-op but check with them first though, just in case as they might close his account...I had basic accounts with Metro Bank and they closed my them. Bankruptcy is about ending your existing financial life and starting a new one. Withdraw all his wages on payday if they'll close the account then go bankrupt.
I opened a Barclays basic account after I declared bankruptcy on 06/03/20...I now have 3 accounts with them and a Zable credit card to build my credit score. In a few months I'll hopefully get a £5 or £10/month mobile phone which will also build the score up a bit.
Join Experian and link his new account.
Good luck.

kevker23

As everyone said, its all about timing and planning. I knew my metrobank account was going to be included in the bankruptcy, but I already had a starling account with no overdraft. I moved my essential DDs and wages to that at least a month before going BR. I ticked main account for my Starling account, but also drew out £500  so I at least had money to buy food etc for the month when my BR went through. I've heard there can still be a chance that your main account can be frozen for a short time, or even closed depending on the bank. After my BR was declared, about a week later I opened a monza account, making sure they knew I was BR, That way I had an account to fall back on if something happened to the Starling account.

In the end the OR wrote to starling saying they had no interest in the account or the funds, but it still took three weeks for starling to confirm that I could still use the account.

Your brother needs to plan all this and have a timeline in place, as this will reduce the stress of the overall process.