Another reason not to go bankrupt

Posted by Ian Carpenter in Declined Credit on 18 September 2012 - Ian is Operations Director at checkmyfile

The process of entering into a bankruptcy – whether forced or voluntary – is a difficult scenario for thousands of people in the UK each year, but the decision by the Co-operative Bank (Co-op) to stop offering bank accounts to undischarged bankrupts could be about to make things a whole lot worse.

Many news outlets would have you believe that the UK’s economy is spiralling out of control, but a steady fall in bankruptcy orders in England and Wales since 2010 suggests that fewer people are finding themselves on the brink. Despite this, the move by Co-op is sure to affect the thousands of individuals that will enter into bankruptcy before the end of the year.

The decision by the Co-op leaves Barclays as the only provider bank accounts for undischarged bankrupts. The Co-op has assured existing customers that they will not be affected. Barclays has not yet followed suit and appears to be willing to continue offering basic banks accounts, which offer limited facilities and no overdraft. The accounts, some of which include a debit card, have no monthly fee and are hugely important factor in allowing bankrupts to re-build their financial position, however long that might take.

Managing Director of retail banking at the Co-op, John Hughes, has defended the move, explaining, “Across the industry there has long been an un-level playing field in the provision of basic bank accounts, with our bank doing far more than most, and we have been calling for some time for this to be addressed. Unfortunately it has now come to the stage where our disproportionate market share of the basic bank account market has continued to grow significantly, and regretfully, we now need to take steps to address this.”

There has long been a social stigma associated with bankruptcy and the imposed financial restrictions can affect people for many years, even after they have been discharged. The impact can be long-standing, with bankruptcies remaining on credit files for 6 years, and on Land Registry records for a further 6 years.

If you’re on the verge of going bankrupt, things could be about to get worse.

Ian Carpenter is Operations Director at checkmyfile, has a degree in Business Studies, and is a Graduate Member of the Institute of Credit Management. He can be contacted at

Turned Down For Credit? Find Out Why.

Getting declined credit can be a huge blow to your plans, especially on potentially life-changing purchases like car finance or a mortgage. Even if you have a good financial history, there are plenty of reasons to get declined credit, and finding out why your application was declined and addressing this problem is the first step to making sure that you won’t be turned down the next time you apply.

Published on 4 Jan 2018 by Jamie Mackenzie Smith

Full Article

What to do if you get declined for credit

Have you been declined credit lately? When you apply for a new credit card or a loan, it is likely that you have the money earmarked for something in particular. Perhaps it’s a wedding, a holiday, or consolidation of existing debts. But whatever your reason for borrowing, being declined for credit can really throw you into a panic, especially when you have no idea why you weren’t accepted.

Published on 16 Mar 2017 by Kelly Luff

Full Article

Declined for credit, what to do

Being declined for credit sucks. Even if the applicant is an otherwise sensible human being, it’s not always easy to accept that a person or computer has decided that you are not worthy of their finance. Even if you do manage to remain stoic in these situations, sometimes that money was needed for financing your grand plans or for debt consolidation, which can be disappointing and/or stressful.

Published on 22 Nov 2016 by Kevin Pearce

Full Article

Small businesses still struggling to find affordable credit

42.4% of credit applications have been turned down, up 1.8% on the previous quarter’s reported experience, according to latest reports from the Federation of Small Businesses (FSB).

Published on 24 Sep 2012 by Barry Stamp

Full Article

Access to 'basic' bank accounts to get easier

The Government has called for people who have been declared bankrupt to be given easier access to bank accounts, as part of its wider investigation into consumer credit.

Published on 27 Jul 2010 by Richard Catlin

Full Article

Lenders may be forced to open up

Credit card and loan providers are set to be asked to be more transparent about the way they calculate the interest rates they charge consumers, as part of an Office of Fair Trading (OFT) review of their practices.

Published on 9 Apr 2009 by Richard Catlin

Full Article

Was it an unhappy Easter for Egg boss

So, Easter is over and done with for another year - and so is the reign of Egg boss Ian Kerr, who has quit the online bank after only a year in charge.

As we reported back in February, the credit card giant caused controversy by writing to 161,000 of its customers to give them 30 days notice that their accounts were about to be closed.

Officially, Egg said that the credit worthiness of these account holders had either declined to such an extent that they were no longer suitable customers, or were at risk of doing so in the near future. However, thousands of disgruntled cardholders – including at least three millionaires - with good credit ratings have claimed that this is merely an excuse, and that they have been punished for paying their balances in full each month and hence not making Egg any money in interest payments.

Egg has denied that Mr Kerr’s resignation had anything to do with the controversy caused by the card cull, and maintain that their decision was purely based on the risk of customer groups falling into default in the future.

The move was part of a wider cost-cutting exercise by Egg owners Citigroup, which took control of the Bank in May 2007. The global credit crisis has seen many lenders tighten up their belts, and make their acceptance criteria more stringent.

This means that getting a good deal on a new credit card is not as easy as it once was. With lenders still with their hands in their pockets, access to a card that has credit card cheques available can be a real contingency to cover any unexpected downturns in your financial fortunes. The current Best Buy credit card which still offers the option to use credit card cheques is the AA credit card. With a Typical APR of 16.9% this is well priced, and at present the card has a 0% balance transfer offer for 12 months (the transfer must be done in the first 90 days of the account opening and carries a fee of 3%) and 0% interest on purchases of fuel and motoring and AA costs for 12 months. There’s also a cashback option of 1% for AA members or 0.5% for non-members, or generous reward points.

Published on 3 Apr 2008 by Richard Catlin

Full Article


We have loads of great customer reviews