Consumer Minister Jo Swinson has announced that the UK Government will now bring forward legislative changes to Section 307 of the Insolvency Act 1986 to make it easier for undischarged bankrupts to obtain bank accounts.
The proposals are contained in the UK Government’s response to an earlier consultation carried out by the UK Insolvency Service which looked at bank accounts for bankrupts.
The Consultation discovered that only 27% of bankrupts were able to retain accounts after becoming bankrupt, whilst 55% would struggle temporarily before getting a new account and 18% would not be able to obtain a new account.
Only Barclays is currently providing basic accounts to undischarged bankrupts after the Co-operative Bank decided earlier this year to withdraw its service.
The changes will not force banks to provide accounts to undischarged bankrupts and the Co-operative Bank has indicated it will only look at reversing its decision if other banks begin offering the service.
The provisions will not extend to Scotland and the Scottish Government has not indicated whether they believe similar reform to scots law is necessary.
A new bankruptcy bill is due to be tabled by the Scottish Government later in this parliament.