www.iva.co.uk

Hi
My wife & I have been in an IVA for 4 years. On occasion we have struggled & sometimes direct debits have not been met. The bank we are with has informed us today that they are closing our basic bank account as of next month.
We have an old (empty) savings account with this bank that has been unused for a few years. They have said that we can use that if we wish with no problem. Would our IVA be affected by this move? Is this a good option or should we try soemthing else?
Any suggestions anyone can give would be most welcome.
Mike.

Hi Mike and welcome to the forum

Which bank are you currently banking with - and why are they closing your account?

Your IVAs will not be affected if you choose to use a different bank account.

Hi Mike
Does your other account support DD and instant cash withdrawal

The only consideration here is does the account they suggest you use do everything you want ? I suspect not !

welcome to the forum Mike.mj !

It appears more banks are turning into HSBC and First Direct style banking approaches and closing accounts on those that are in IVA's. So unfair !

Does your saving account offer the direct debit / cash withdrawall facilities that you require on a regular basis ? If so then I cannot see the difference between allowing you to maintain the current basic account !

I would ask to discuss the situation with the Branch Manager and establish if it is for a specific reason regarding your circumstances or a change in banking policy ?

Hi and welcome to the forum.

Is the bank closing the account because of the bounced direct debits? I know the Co-op has a '3 strikes and you're out' policy.

Thanks for your replies.
The account is a CoOp Cashminder which we opened at the beginning of our IVA.
The issue seems to be that due to money going short from time to time we have had some direct debits returned. The CoOp has decided this is in breach of the account T's&C's and has informed us today that the account will be closed as of next month.
We have had a savings account with the CoOp for years that has remained dormant since before the IVA which the CoOp says there is no issue with using from now on. Given that we would probably struggle to get another account elsewhere this seems a fairly easy fix, but obviously I have a natural distrust of banks!

Ah -- yes, the Co-op, as Skippy says, has a three strikes and out policy on the cashminder accounts. Some members have managed to keep the account, but with the DD facility removed.

Have a look at the Yorkshire Building Societies Cash Transactor savings account.

This happened to another poster recently and they were allowed to keep their Cashminder account open but not have direct debits going out. It might be worth speaking to the Co-op about that.

The other option is a paid for account like Secure Trust or Clearcash. You pay a monthly fee for the account but there are no penalty charges.

This is where accounts like ClearCash, Secure Trust and Think Money have their part to play. With these accounts it is impossible to go overdrawn, and there is no credit checking to get an account set up. The downside is that they carry a monthly management charge - so weigh up the options, but importantly make sure the account is operated within its financial boundaries, and do not let yourself get into a position to default.

Thank you allvery much for your help. You have put my mind at rest a bit more![:)]

Thinkmoney charge a monthly fee but you get a cashcard and excellent service, very sympathetic and helpful.

Whilst companies such as ClearCash, Secure Trust and Think Money have their place, an IVA is a time of rehabilitation.

It must surely be better if you can get a mainstream bank account.

If it is impossible to go overdrawn for the duration of your IVA then that is another skill that you have to learn when you do eventually return to mainstream banking after your IVA.

I have nothing to back this up but can imagine using ClearCash, Secure Trust and Think Money and even credit cards such as vanquish could harm you long term when trying to rebuild your credit rating.

It will be interesting to see if Sam Mond has any comments to make as to whether the ClearCash account is harmful to rebuilding a credit rating. I am definately no expert in that regard.

I have had a Secure Trust account since entering my IVA and to be honest it has been just great. By having the prepaid mastercard as the only means of drawing cash it has taught me to live within my income. I have to budget for all my DD's with a slight provision on the 2 mobile phone contracts for the odd picture message here and there. I know to the penny where my money goes and what is left at the end of each month, which is only ever a couple of quid, but never too close to nothing or what would be an overdrawn situation in a mainstream account. I don't see any drawbacks to this or other accounts like ClearCash when the only other option is a free basic account that can have the door shut in your face for a minor money digression. The account fee is submitted as part of my I&E and has never been questioned at review times so I see that as a none issue. I can't see how having this account can be harmful to my credit rating though.