Basic bank account lifeline extended to bankrupts
Insolvency trade body R3 welcomes the news that undischarged bankrupts should find it easier to access a high street bank account – currently there is only one mainstream provider offering them. This move comes as research by R3 reveals 79% of the British population agreed that undischarged bankrupts should have access to a basic bank account.
Today Business Minister Jo Swinson agreed legislative changes to the Insolvency Act 1986, which will restrict the circumstances in which a trustee in a bankruptcy can make a claim against a bank.
R3 President Lee Manning commented:
“This is a positive move, and recognises that there is life after bankruptcy. Quite simply bank accounts are a necessity not a luxury – imagine trying to run your life without one. In the past undischarged bankrupts would have found it impossible to pay in wages or pay out bills easily.
“Furthermore, making this change through law rather than by a voluntary code or guidance ensures that the insolvency practitioner’s statutory duties remain clear, and there will be no conflict with their duty to recover funds for creditors. Currently, the banks are worried that a trustee in bankruptcy could claim compensation from the banks where funds have passed through a bankrupt’s account. This perceived risk has put off banks from offering even a basic account to undischarged bankrupts.
“We hope this solution will ensure the banks now offer this lifeline to undischarged bankrupts simply trying to get their finances back on track.”
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Notes to editors:
? R3 is the trade body for Insolvency Professionals, and is made up of 97% of the UK’s Insolvency Practitioners from all over the UK.
? R3 comments on a wide variety of personal and corporate insolvency issues. Please contact the press office, or see www.r3.org.uk for further information.
? R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by one of nine recognised professional bodies.
? R3 stands for ‘Rescue, Recovery, and Renewal’ and is also known as the Association of Business Recovery Professionals.
? Methodology note:
ComRes interviewed 2051 GB adults online between 28th and 30th September 2012. Data were weighted to be representative demographically of all GB adults. ComRes is a member of the British Polling Council (www.britishpollingcouncil.org) and abides by its rules. Full data tables are available at: http://www.comres.co.uk
R3 Press Office