Bankrupt bank account changes proposed

A proposal to change insolvency law allowing bankrupts to open bank accounts in England and Wales has been put before Parliament.

The amendment will reduce financial risk for banks that offer accounts to undischarged bankrupts as part of the draft Deregulation Bill, brought by The Insolvency Service.

The changes were introduced following concern from consumer representatives that bankruptcy was stopping people from getting bank accounts – essential for basic tasks such as receiving wages, paying bills or shopping online.

Business minister Jo Swinson 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.

“Last year, over 30,000 people were declared bankrupt and a similar number took up Debt Relief Orders (DROs), and it is only right that they get a chance to have bank accounts.”

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