If you are going bankrupt, one of the very first
questions that are asked by an advisor are what happens to their bank
account, if it is worth opening a basic bank account prior to declaring
bankruptcy, and if all accounts need to be disclosed. It is internal
guidance within the Insolvency Service that the official receiver
should notify any banks where the bankrupt held an account as soon as
practically possible (and certainly within five working days of the
bankruptcy order) and should do so as soon as he/she obtains the bank's
full address and account numbers.
The Statement of Affairs asks for details of all
bank accounts which the bankrupt has and also any which are jointly
operated.
Many people now have internet or telephone only
accounts and the OR will not seek passwords, pin numbers or security
information and also will not attempt to gain access to it.
The Official receiver maintains two distinct
letters for writing to a bank. They are available for staff on its
internal document production system. Each letter provides an option for
dealing with the bank account and will be dependent on how the Official
Receiver views the account.
The first type of letter will notify the bank of
the bankruptcy order and should be used where the official receiver is
content for the account to be closed. The OR can then also request any
or all of the following:-
- Where there is a credit balance, asking for the
balance to be remitted to the official receiver.
- Where no further information is required from
the bank.
- Where there are further standard questions
requiring an answer.
A second letter is available for use in cases
where the official receiver is content for the bankrupt to continue to
use the account, subject to bank policy. It is most likely that this
will occur when the bankrupt's regular income is paid into the account
concerned. There are options available to tailor this letter: -
- Where there is a credit balance on the account
but the official receiver is happy for the funds to be released to the
bankrupt.
- Where there is a credit balance on the account
and the official receiver requires all, or part of the balance remitted
to him/her.
It is not the intention of the OR to get every
account closed and dependent on the bank in question it is not
necessary for a bank to automatically close a simple account that is
working effectively.
The account will likely be frozen automatically
and can take up to five days to unblock after the event. This can cause
problems if it coincides with direct debits coming out of the account,
or access are needed to funds.
Where the official receiver is realising a credit
balance on a bank account, the Insolvency Service approach is for the
OR to take a practical approach. The cost of the efforts made should
not be more than the amount realised. If the balance (or sum of
balances with one bank) which the official receiver is seeking to
realise is £50 or less, a simple letter should be sent asking for the
balance, perhaps a telephone call to follow up and then no more than
one further follow-up letter. Where the amount to be realised exceeds
£50, the official receiver should use his/her discretion as to the
effort required from his/her staff.
In my opinion you should not hide any bank account
from the Official Receiver but people who have been bankrupt have done
so and then advised the OR about it and as it was simple account only
with no money, he has allowed it to remain untouched. This may not
happen in every case, and each situation will likely be different.
Article Source:
http://www.articlesbase.com/debt-consolidation-articles/what-the-official-
receiver-does-with-your-bank-account-in-bankruptcy-1728327.html About the Author
Contact Steve Thatcher of Help With Debt (UK)
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