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Bankrupts 'need better access to bank accounts'

Something needs to be done to make sure bankrupt individuals can open a bank account. The Government said this just yesterday, pointing out that not having a bank account can have a real negative impact on someone's finances - at a time when many are trying to focus on getting their finances back in order.

When someone's been made bankrupt, having a bank account is an "essential stepping-stone" to managing their finances properly and getting back on track once they've tackled their financial difficulties, said Business Minister Edward Davey.

"Without access to a bank account," Mr Davey said, "even the simplest financial transaction is beyond reach for an undischarged bankrupt. What I want to see are financially capable consumers who are able to effectively manage their money and make the fresh start they need."

As The Insolvency Service specifically points out, there's no actual law keeping a bankrupt from opening an account - it's the decision of the bank account provider. Nonetheless, even basic bank accounts tend to be out of reach for people who've not yet been discharged from bankruptcy: right now, only two high street banks provide basic bank accounts that are available to undischarged bankrupts.

A spokesperson for the IVA Advisory Centre commented: "Entering bankruptcy is a big step - not something people take lightly. It's encouraging that ministers are highlighting the need to help people take the necessary steps to tackle their debts."

The Insolvency Service has begun a consultation, looking into ways of improving access to financial services for undischarged bankrupts. It will finish on 9th February next year.