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Some Suggested Bank Accounts For Use During An IVA

Co-operative Bank Cashminder Account

Potential Advantages:

  • There is no monthly account charge.
  • The acceptance criteria include persons that are in an IVA.
  • You may apply by telephone, or in-branch.
  • You can bank online, by telephone, or in-branch.
  • A debit card is provided along with the account.
  • You can set-up standing orders and direct debits during the IVA.
  • You can use a local Post Office for basic banking transactions.

Potential Disadvantages:

  • The Co-operative Bank branch network is limited.
  • You cannot apply for the account online (phone or in-branch).
  • There will be bank charges if you have unpaid items or go overdrawn.
  • Repeated account transgressions like unpaid items could see the account being closed.

IVA Advice Forum Viewpoint. This Account May Suitable If:

  • You don’t have debts to Co-operative bank, Smile, or Britannia.
  • You don’t often have failed standing order or direct debit payments (bank charges would apply and your account might get shut down).
  • You are happy with the limited branch network on offer.

Further Information From The Co-operative Bank Website: Cashminder Account

ClearCash Prepaid MasterCard & icount facility (Various Fees Apply)

Potential Advantages:

  • Guaranteed Acceptance. There is no credit check as part of the application process.
  • Your salary and benefits can be paid into the account directly.
  • You can pay direct debits, standing orders and bill payments from the account.
  • Bank online or by telephone.
  • Card purchase protection applies.
  • Additional cardholders can be added to the account.
  • Creditbuilder facility could help you to improve your credit rating.
  • No penalty charges for missed payments. Cannot become overdrawn.

Potential Disadvantages:

  • Monthly account fees (and other fees) apply.
  • There is no way to pay a cheque into the account.
  • No branch network.

IVA Advice Forum Viewpoint. The ClearCash Prepaid Mastercard & icount Facility Account May Be Suitable If:

  • You are having difficulty opening a bank account elsewhere.
  • You are comfortable with banking online or by telephone.
  • You do not need to be able to pay cheques into your account.
  • You consider that a Creditbuilder facility might help you to improve your credit rating.

Further information on the ClearCash website: ClearCash Prepaid Mastercard *

thinkmoney Personal Account (Monthly Account Fee Applies)

Potential Advantages:

  • No credit check takes place when you apply.
  • You can apply online or by telephone.
  • You may bank online or by phone.
  • A debit card is provided with the account during the IVA.
  • You can set-up standing orders and direct debits during the IVA.
  • No charges apply for unpaid items or going overdrawn.

Potential Disadvantages:

  • A monthly account fee applies.
  • No branch network.

IVA Advice Forum Viewpoint. This Account May Be Suitable If:

  • You are finding it tough to get a bank account elsewhere.
  • You do not want the risk of bank charges for unpaid items or going overdrawn.
  • It would be useful to you to have extra help with budgeting during the IVA.
  • You are happy to bank online or by phone.

Reasons To Change Bank Accounts Before An Individual Voluntary Arrangement

If you are soon to start an IVA (or other types of debt solutions like a debt management plan or bankruptcy) you will usually be advised to get a new bank account.

One reason for this is the possibility that you have debts with your current bank that will become creditors in your individual voluntary arrangement.

Failing to get a new bank account at a new bank put you in jeopardy of your income being “set-off” against the debts in the IVA. This situation arises if a bank takes cash from a current account to repay debts on another account. You could be left without the money you need to live from day to day.

A further potential jeopardy is that your current bank will probably stop you from using your existing account when they learn of your IVA (and especially so if you owe them money). The threat of having no access to a bank account during an individual voluntary arrangement is a serious one and at the very least would be very inconvenient until an alternative can be found.

Why Apply For A Basic Bank Account When Starting An IVA?

It may be the case that your credit rating has already been affected (by missed payments or simply by very high debt levels) in which case you might not be able to secure a bank current account that offers facilities such as overdrafts or cheque books (even before an IVA starts).

If you did get an account with credit facilities ahead of the commencement of your IVA this new bank might shut the account if they were to later establish that an individual voluntary arrangement had been put in place. It will also be the case that your IVA will (almost always) place restrictions upon your ability to secure new credit prior to your discharge.

It’s usually the case that basic bank current accounts don’t offer any credit facilities. However this should not mean that decent customer service and functionality isn’t on offer.

Got Further IVA Bank Account Advice Questions?

If you have further IVA related bank account questions you may wish to visit our IVA Advice Forum itself. Experts from a range of individual voluntary arrangements firms will be able to answer your IVA bank account questions or indeed provide information on any other IVA questions that you might have.

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IVA Advice Forum Advisor Kelly Jago IVA Advice Forum Expet Susan Clay IVA Advice Forum Expert Beverley Budsworth

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