Jokes0 min ago
A 2nd Bank Account
21 Answers
An old school friend rang me last night. We haven't seen each other for about 30 years. While we were chatting, I told her about having to become bankrupt last year and after commiserating with me, she blithely told me that a younger friend of hers, (aged 24), had become bankrupt and that because my friend had two current accounts with her bank, she allowed this girl to have her wages paid in there and has given her the Debit Card for that account to use. Presumably in my friend's name and not the girls.
I din't say anything at the time, mostly because I couldn't get a word in edgeways but, is this legal and how is her bank letting her do this?
Just curious.
I din't say anything at the time, mostly because I couldn't get a word in edgeways but, is this legal and how is her bank letting her do this?
Just curious.
Answers
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You are allowed a bank account while bankrupt. There is nothing illegal about having your wages paid into an account in someone else's name.
However, your friend is pretty unwise to do what she says. Using a debit card could easily result in an overdraft on the account (even if one is not authorised); if the girl didn't (or couldn't) pay it off your friend is legally liable, as the account is in her name.
Far better to help the bankrupt get a basic account in her own name - Co-op Bank are the best for that, & often give an Electron card with the account.
However, your friend is pretty unwise to do what she says. Using a debit card could easily result in an overdraft on the account (even if one is not authorised); if the girl didn't (or couldn't) pay it off your friend is legally liable, as the account is in her name.
Far better to help the bankrupt get a basic account in her own name - Co-op Bank are the best for that, & often give an Electron card with the account.
What about money laundering though? I think my friend thinks she is helping her young friend to stay on the straight and narrow, as the account has no overdraft facility.
Can wages just be put into any account electronically, with no name and just a sort code and account number? I thought that was impossible.
Can wages just be put into any account electronically, with no name and just a sort code and account number? I thought that was impossible.
If the bankrupt was to use the account for anything other than wages & other ordinary day to day items, then it could be seen as attempting to put assets beyond the reach of the Official Receiver, which is a bankruptcy offence.
Money laundering comes under different legislation. Banks can enquire into the source of large deposits to accounts.
Money laundering comes under different legislation. Banks can enquire into the source of large deposits to accounts.
I don't understand why the person in question didn't just get their own bank account (all banks are obliged (in theory) to offer a basic bank account to bankrupts - I got my first account after bankruptcy with the co-op and got an electron card with no overdraft facility (obviously), in some cases the only one you can get is with the post office.).
