Does a DRO Affect My Bank Account?

Worried about your bank account being affected when you apply for a Debt Relief Order (DRO)? This article answers the question: Does a DRO affect my bank account?

You may also want to read our article on DRO restrictions for more information.

My partner and I have separate bank accounts, will this affect my DRO?

Having separate bank accounts will have no relevance with regards to your DRO. The Official Receiver will look at your joint budget as a couple and will pro-rata payments on your financial statement with respect to your income and expenditure. Following this if your disposable income is less than £50/month you will remain eligible for your DRO.

If a household has more than one person living in it then it can have an impact on the finances of everyone within the household. So there will be times when it can have an effect on the disposable income that somebody has and therefore the need for the DRO to continue or be revoked.

As an example; if somebody had responsibility for all household bills and then somebody else moved in and started paying half of the rent, gas, electricity, water etc then it might mean that the person in the DRO now had more than £50 a month left over.

As there are too many possible scenarios it is worth noting that if there is a change of financial circumstances during the DRO then you are required to notify the Insolvency Service and your situation will be reassessed. For more information, please read our article on how a DRO will affect your partner.

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Can I open a bank account after DRO?

Whilst there are no specific restrictions on opening a bank account after a DRO, the DRO is recorded on your credit reference file for up to six years so you may find it difficult to do so.

After the DRO has finished it is likely to take a while before your credit rating improves and this may limit your choices rather than exclude you from opening an account.

Each bank will have their own policy on the accounts they offer and credit ratings so you may wish to check the banks that are convenient for you and contact their customer care line, or call into the branch, to ask about their basic bank accounts.

If you are opening a basic bank account it will generally allow you to pay into the account, pay by debit card, set up direct debits and standing order mandates and draw money out from the cash machine.

It will not have an overdraft and does not have a monthly fee for running the account so you may find that the bank is more likely to allow you to open this type of account than one that requires a credit rating check.

How long after the end of a DRO will my account be unfrozen?

Your best starting point will be to speak to the bank directly and ask why your account is frozen and why you are being denied access to your savings. If the bank that holds your savings was also a creditor included in your DRO then they may have frozen all accounts when the order was made.

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Does a DRO affect my bank account?

A DRO should not affect your bank account. If your account has been frozen after applying for a DRO, you must first contact your bank for answers. Generally speaking, If you get a DRO, it will be up to your bank or building society to decide whether to freeze the account or not.

One reason for your bank account freezing could be that you owe money on an overdraft for that account. The bank might be trying to seize the money to pay it off.

Ask your intermediary if they can do anything to get it back, but first, open a basic cashcard account, and have any future payments paid there (i.e. wages). You probably won’t be able to do this at the same bank you owe money to, but otherwise, it should be fine.

Please also remember that one of the qualifying criteria for DRO’s is that an individual has less then £50/per month disposal income available to them after all their living expenses have been taken into account.

Certain living expenses, such as food, will attract certain allowances (based on the number of individuals living in a household) within which an individual is expected to stick to.

You may also want to read our article on filing complaints against a bank.

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