Finance Pundit ? Blog Archive ? The bankruptcy and banking battle

bankruptcy

If you?re looking for a bank account while bankrupt, you may feel like it?s a real battle to get the account you want.

Bankruptcy is a ?last resort? for people seriously struggling with their unsecured debts - and as a result, your finances will be squeezed and many of the bank accounts you see advertised could be off limits.

Let?s take a look at how bankruptcy could affect the way you bank, and what options could be available to you if you?re struggling to get back on your feet.

Banking and bankruptcy:

If you?re currently bankrupt, or have recently been discharged from bankruptcy, your finances will be seriously affected as a consequence.

If you can afford to do so, you?ll be making regular contributions towards your unsecured debts for up to three years, which will obviously leave you in pretty tight circumstances.

However, even if you?ve recently been discharged from bankruptcy, and you?ve had any outstanding unsecured debts that you can?t afford to repay written off, you won?t be able to make a ?new start? with your finances straight away.

Bankruptcy will affect your credit rating for six years from the day it begins, which will affect your ability to apply for things such as further credit - or open a bank account.

But if you are having bankruptcy problems, and therefore issues with your banking, there is an alternative approach that could be considered - a bank account for bankrupts.

Bankruptcy bank account:

The vast majority of current accounts require a credit check before they can be opened. If you?ve been made bankruptcy, and have a poor credit history as a result, many bank account providers will turn your application down.

Bankruptcy bank accounts, however, are different. They don?t require a credit check, so you won?t be treated any differently to someone with a higher credit score if you decide to apply for one.

This type of account will give you a secure place to store your money, and like any current account, allow you to pay bills by standing order or Direct Debit and withdraw your cash from ATMs.

A bankruptcy bank account won?t come with an overdraft facility either, so if you?re determined to avoid any further borrowing in the future, it could really help you resist the temptation.

So, when it comes to finding a bank account that champions your needs during or after bankruptcy, a bankruptcy bank account could certainly be a winner.

Source: http://www.financepundit.com/the-bankruptcy-and-banking-battle/

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