How Do I Handle My Personal Finances Whilst Bankrupt?

A few questions that come up a lot once someone has been made bankrupt is how do I pay my bills?

How can I bank?

What about my wages or benefits, how can I still get paid or receive these?

What about my the other accounts I have, and any joint chequing accounts with my spouse/partner?


Once you are made bankrupt, basically your finance come under the scrutiny of the Official Receiver, meaning they need to know all your monthly expenses and your income/wages/benefits, and approve all the expenses you have each month.

Once this has been viewed and approved you go about living your life, and usually within 12 months your bankruptcy will be discharged, or over, and you no longer are under the restrictions of bankruptcy.

However, during the time of your bankruptcy, until you are discharged, you are obligated to report any changes in your finances and your status to the Official Receiver.

So once bankrupt, how do you get by and pay your bills and live and handle your finances.

Once the Official Receiver has reviewed your forms and noted all the bank accounts you have, they will notify those banks to freeze the accounts. Some banks if you owe them money, once they are notified of your bankruptcy, will freeze any account you have with them to access or take any money you may have in the account.

This the bank/creditors right to offset the loss they may incur from your going bankrupt and owing them money.

So, the OR notifies any bank you have an account with and it is frozen, so how do you bank whilst bankrupt?

You are allowed a basic account whilst bankrupt, and you can have this in place prior to going bankrupt. If it is frozen by the OR, they will un-freeze it once they are aware it is a basic account; also during this time the bank is to continue to pay your priority bills you may have being paid out of this account.

So you are allowed a basic account that can have your wages, benefits, etc paid into and your direct debits and standing orders paid out of.

Of course who to open this account with, what banks will do this for you?

We have heard of a only a couple that will do this, however you can inquire around with various banks and see what they will or will not do. Many have their own rules and regulations about who thy will grant an account to.

The few banks we have been told will work with bankrupts are Barclays and the Coop Bank. The Post Office may as well, but best to confirm this with them.

Barclays and the Coop have stated as long as you do not owe them any money and/or have a history of fraud, they will grant a basic account to someone who has gone bankrupt. But again, best to confirm this with the actual bank/branch.

These rules are subject to change.

So you now have your basic bank account in place, the Receiver has reviewed your bankruptcy forms and agrees with your monthly expenses, next one of two things can occur, one is you have a surplus of income each month and are required to pay a portion of this surplus into the bankruptcy for three (3) years. This covered in more detail in a previous writing.

If this doesn’t occur, you receiving an income payment arrangement to pay into the bankruptcy, then you just go about living your life; but now you do it without the debts you had.

You will need to learn to live on what you have as an income and not rely on credit.

One thing that may help is to use your income and expenditure form as a foundation and set-up a household spending plan; tracking your spending for a few months to see exactly where your money is going.

This visual display of seeing where you are spending your money can help you in making changes in your spending habits. More on spending plans at a later time.

One of the things you will need to begin getting into the habit of is saving.

Now this may be difficult during the period of your bankruptcy, but it is something we all need to do more of.

There will come emergencies or large purchases we may need, and we need to have something saved away for these times.

Also, later once your bankruptcy has been discharged, having a savings account and showing a regular pattern of saving will help in re-building your credit.

So as you see, it is not impossible to bank and handle your personal finances during and after bankruptcy.