Sometimes, despite our best efforts to tackle our debts, bankruptcy is the only solution. This is particularly the case when unsecured debts are insurmountable and there is no realistic way to repay them within any reasonable amount of time.

Unfortunately, many banks don’t want bankrupts as customers. People still going through the process of bankruptcy (‘undischarged’ bankrupts) may find it even more challenging to find a bank account. This is because many banks will look at your credit history when you apply.

Not having a bank account can cause all sorts of problems. It’s difficult to keep your money somewhere safe. You cannot make Direct Debit payments – which is not only inconvenient for paying bills and other expenses, but your utilities could actually work out more expensive, as many utility providers offer discounts to Direct Debit customers.

However, it is still possible to open a bankruptcy bank account if you have a history of bankruptcy and even if you are an undischarged bankrupt. If you’re in that situation, look for a bankruptcy bank account that doesn’t have a credit check, so your credit score won’t matter.

The benefits of a bankruptcy bank account

When you have a bankruptcy bank account you can make Direct Debit payments for bills and expenses, which is more convenient. You can also transfer money between different accounts and keep your money somewhere safe.

If you choose a bankruptcy bank account with a debit card, you could make cash withdrawals from ATMs while you’re out and about, you could make payments in shops and restaurants with your card, and you could even make cash withdrawals and purchases overseas. You’ll find an example of a bankruptcy bank account and some more of the benefits here.

Using a bankruptcy bank account wisely

Undischarged bankrupts will continue making payments into their bankruptcy for usually 12 months, although certain financial restrictions can apply for even longer.

Budgeting during the process of bankruptcy is essential, as undischarged bankrupts may find they’re living on a greatly reduced income during bankruptcy. A bankruptcy bank account that also comes with additional budgeting assistance could be even more useful.

An account like this could also be useful for anyone who would like a little extra help with managing their money for bills and expenses in the years following bankruptcy.

 

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