I recently filed for sequestration, how am I supposed to manage without a bank account?
August 27, 2013
Despite optimistic reports that the economic situation is improving, sequestration levels remain high in Scotland when compared with pre-recession statistics.
For many individuals, unmanageable debts that forced them to declare bankruptcy (or sequestration in Scotland), means they are unable to carry out essential, day-to-day tasks such as paying bills via direct debit, and receiving wages. Several reports suggest that one in five people declared bankrupt, are living on a cash-only basis.
Regulations surrounding bankruptcy make it very difficult for a bankrupt to open a bank account. Existing accounts can be frozen until permission is given from the Official Receiver, or even closed at the discretion of the individual bank. If not properly organised prior to the sequestration being finalised, access to necessary incoming payments such as benefits could be affected. Benefits and other important payments can be paid via other methods, but arrangements need to be made in advance so you can avoid being out of pocket. For information on how to switch your benefit payments before you’re officially declared bankrupt, or to find out more about the effects of bankruptcy, call Scotland Debt Solutions today and we’ll provide you with the knowledge you need to ensure you’re prepared for what’s to come.
In an age where the use of modern technology is constantly growing, and in fact, key to everyday life, limited access to a bank account can make daily living much more complicated. Something as simple as paying your energy bills by direct debit can offer savings of around 8 per cent. However, without the option to use this facility, you’re unable to take advantage of considerable savings, which might hinder your ability get back on your feet.
Though insolvency laws in Scotland differ from those in England and Wales, recent plans to alter the liability placed on the banks which currently prevents them from offering their services to bankrupts, could affect Scotland in the future. Commenting on the plans, Jo Swinson, Business Minister, said: “We are now closer to removing barriers that have prevented banks from providing bank accounts for bankrupt people in the past. A bank account is not a luxury in this day and age, but a necessity. Most everyday transactions take place online including shopping, paying for utilities and receiving salaries… Banks will still make the final decisions on offering accounts, but I am confident that the change will make it more appealing to them. It will also offer a new lifeline to vulnerable people who have struggled to access basic financial services.”
Gillian Guy, chief executive at Citizens Advice believes the amendment is a “fundamental step” in accessibility to bank accounts for undischarged bankrupts and urged the banks to “embrace” the change.
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