Safe Bank Accounts
When you’re dealing with your debts, it’s very important to have a ‘safe’ bank account which isn’t linked to any of your creditors. This is because if you fall into arrears with payments to a credit card or loan, and you also hold a current or savings account with the same bank or building society, they can use the ‘right to offset’ to take funds from your account to bring the debt repayments back up to date.
Having a ‘safe’ bank account can help you to avoid this situation. Please note that the ‘right to offset’ extends across different banks and building societies in the same group. Linked banks and building societies can use the right to offset to claim funds back from accounts held within their parent group, so it’s worth knowing which banks are linked.
If your existing bank account is linked to any of your creditors, you should consider switching to a ‘safe’ bank account, especially if you are planning to embark on a debt solution that will involve making reduced payments to your creditors.
These days, changing your bank account is quite a straightforward process. For more information about basic bank accounts, visit the Money Advice Service website, or read their Basic Bank Accounts section.