Since the start of the economic slump, it has become increasingly harder for people to get bank accounts. It has become even harder to get a bank account for bankrupts. This is because banks have been affected by the downturn as well and are now very reluctant to take a risk with people. For those who have suffered financial difficulty and have had to declare themselves bankrupt, this is a nightmare. Not only has it become virtually impossible to take up credit. But they are also being deprived of some of the most basic facilities required to make a fresh start again. This is why, over the past few years, various alternatives for bankrupts have been made available, allowing them to perform financial transaction despite their bad credit rating.

Bankrupts face unacceptable difficulties

bank account

People who have had problems managing their finances in the past will have a poor credit score when a credit check is carried out. This, in itself, is neither new nor particularly surprising. What has added further urgency to the dilemma, however, is that increasingly, people who have been bankrupt are very unlikely to be accepted for a standard bank current account, even the most basic bank account there is. These consequences are simply unacceptable. Bank accounts are an important part of every day living after all and it is all but impossible to get by without one: People get their wages paid into the bank, set up direct debits, standing orders, make money transfers, write cheques, get debit cards – the list of things you’ll have to miss out on goes on. Unfortunately, despite public pressure on banks to provide basic banking services even to bankrupts, there is still no guarantee to you are going to be accepted.

A bank account for bankrupts

The good news is that there are now bank accounts for bankrupts. This might not be the same as a bank account for the regular bank customer, but it will offer some of the most important basic banking facilities nonetheless. It is called a guaranteed bank account, because no credit checks are performed and you are truly guaranteed to be accepted. The benefits of a guaranteed bank account are that you can deposit and withdraw money, access ATM machines with a prepaid card and have a financial assistant to help you with your money. Payment protection is often included as well. Some guaranteed bank accounts will let you set up direct debits. This is important because it will help you rebuild your credit score over time if you don’t default on the direct debit payments. A bank account for bankrupts offers those people with a chequered credit history the opportunity to start managing their money more effectively and so in the future, money lenders will see how the person has managed their money. This will allow bankrupts to slowly work on a recovery and alleviate some of the harsh consequences attached to an individual insolvency.

The downside of a bank account for bankrupts or a guaranteed bank account is that you have to pay fees. There is likely to be a monthly payment to make. The exact amount will vary, depending on where you open the bank account. Some providers will charge very little, some may charge about twelve pounds. And yet, the monthly fee should never be your only focus, as there may also be other fees to consider. Using an ATM can cost you every time you use it. There may be a loading fee for the prepaid card and there may also be a transaction fee every time you make a purchase with your prepaid card.

The pros most certainly outweigh the cons though for someone who cannot get a regular bank account. If you’re bankrupt and looking for a bank account, informing yourself about guaranteed accounts should be your top priority.

By Jasmina