Frequently asked questions 

You may have been advised to set up a new bank account. Please read the following questions and answers about this. 

When do I need to change bank?

You only need to change your bank if you have a debt with them (e.g., loan, uncleared overdraft, credit card debt etc.) that we are including in the IVA. 

What will happen if I do not change bank and the above applies to me?

When we notify your bank of your proposed IVA they will often automatically freeze all accounts that you have with them (single and joint accounts). This could mean that you would be unable to access any funds in your bank account and would be unable to pay bills etc. Direct debits and standing orders would also be stopped which could obviously cause difficulties with your rent or mortgage, or other important regular payments. 

If this happens then we will attempt to get the bank to release funds, for example if you have just been paid, but this is not guaranteed to be successful and, even if it is, there will be a considerable delay before your funds are returned. 

Which bank should I move to?

We are unable to recommend any particular bank but you should take care to be sure that you are not moving to a bank that is actually part of the same company, or group of companies, as your current bank. 

At the end of this sheet you will see a list of examples of banks that are associated. 

This table has been produced by the Bank of England and can be found, along with further information, at their website: https://www.bankofengland.co.uk/prudential-regulation/Authorisations/financial-services-compensation-scheme. 

What is the easiest way to change bank?

The easiest way to change your bank account is usually online. You need to apply for a basic bank account only with no overdraft facility. Some providers can do this very quickly and can sometimes give you new account details within 24 hours. 

If you go to the branch to change account you need to be very clear that you do not want an overdraft, as banks will often complete a credit search to approve an overdraft facility as a matter of course. This may cause you to be rejected for a new account if you have a poor credit history. 

I have been offered an automatic switch by my new bank; should I do this? 

It’s usually the case that once clients have decided that they want to proceed with an IVA, they want it to proceed as quickly as possible. We therefore recommend that you do not complete the automated switch as this can be a lengthy process and you are reliant on the bank to manage the changeover. We advise to set up your payments yourself once the new account has been opened instead, as this is usually a lot faster to do and you remain in control. 

Of course, you can rely on the automatic switch if you wish but we will not proceed with your IVA Proposal until this has been completed. 

I have my new account details, what do I need to do? 

If you are employed you need to contact your employer to tell them that you need your salary paid into your new account from your next pay. If you receive benefit income or child support you need to contact the relevant agency (HMRC / DWP / Council) and advise them you need your benefits paid into your new account. You will also need to set up your direct debits and standing orders for your essential expenditure, such as rent, mortgage, utilities and HP, to come out of your new account moving forwards. 

I have now changed bank and organised all my payments, what do I need to do now?

You need to contact us and tell us this is done. We can then set the date for your meeting of creditors and issue your paperwork to your creditors. 

What can I do if I don’t want to change bank?  

If you have debts with your current banking provider then these debts will be bound by your IVA, so you will need to change bank or your funds will be frozen. We would not recommend proceeding with the IVA without changing accounts. 

However, if you only have a small overdraft (and no other debt with them) and wish to keep that account then provided you can clear it before the date of the creditor’s meeting you will be able to retain it. You will have to provide us with proof that this has been done before the IVA can be accepted. 

You will be advised to change your bank if you have debts with any affiliated banks. For example, if you bank with RBS and have a debt with NatWest, you will have to change accounts to any other non-affiliated bank. 

Please note that the above is subject to change and is not an exhaustive list. You must make sure that any new bank you approach is not connected to any of your creditors. Further information can be found online, for example, at the PRA website at www.bankofengland.co.uk/prudential-regulation.