Bank Account When You Owe Money UK: Can They Refuse?

The adviser turns the screen slightly away while the credit check loads. You already know what it will say: two defaults, a county court judgment and an overdraft you stopped looking at months ago.

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Who can say no

A bank or building society can refuse to open an account, and it does not always have to tell you why. A poor credit rating is the usual reason a standard current account gets turned down. Standard accounts can come with an overdraft, which is money the bank lets you spend that you do not have.

Bankruptcy is the one case where the rules above bend. Citizens Advice says the same thing two ways on its pages: someone who is bankrupt will not usually be allowed to open an account, but may be able to open a basic one. Read together, a standard account is unlikely and a basic account is the realistic route.

If you are bankrupt

Your existing account is the first thing to wobble. When the bank gets notice of the bankruptcy it may freeze the account straight away. Some banks let you keep it after the freeze, some close it. That is the bank’s decision. The official receiver, the person who runs your bankruptcy, has no say in it.

Two things catch people out. If you owe the bank an overdraft or other debt, it can keep money in the account to cover it. And a joint account can be frozen too, or changed into an account in the other person’s name alone.

Do not open a fresh account just before you go bankrupt. The official receiver would freeze that one as well, and the bank might close it.

After the bankruptcy starts you can apply to any bank. It may ask if you are bankrupt, it decides whether to accept you, and it may say no overdraft. Money in an account above what you need for reasonable living costs has to be reported, because the official receiver can claim some or all of it for your creditors. If every bank says no, the fallback is a basic account, a credit union account or a prepaid card. The full detail is in credit file and bank account after bankruptcy, and our bankruptcy and DRO checker shows whether bankruptcy is even the right route.

The account that is much harder to refuse

Ask for a basic bank account. Citizens Advice says you should still be able to get one even if a credit check shows previous bad debts or outstanding CCJs. The bank or building society must tell you whether it offers basic accounts and what conditions you need to meet.

The mistake that costs people money

Say you have an overdraft with one bank, then open a basic account with another bank that belongs to the same banking group. Citizens Advice warns that the bank may use the money in your new account to pay off the old debt. That is called set-off. Your wages arrive and the bank takes them for the overdraft.

Banks with different names can belong to one group. So before you apply, write down everyone you owe: overdrafts, cards, loans, and which bank each one sits with. Then open the new account outside that group. Our guide on whether your bank can take money from your account explains when set-off applies.

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What to take with you

You usually have to show two separate documents that prove who you are, including your full name, date of birth and address. If you do not have them, the bank should accept a letter from a responsible person who knows you, such as a GP or teacher.

If they say no

1. Ask which type of account they refused, and whether they offer a basic account.
2. Use the bank’s complaints procedure and note the date you first complained.
3. Give it at least eight weeks, unless the bank sends a “letter of deadlock” sooner.
4. Take it to the Financial Ombudsman Service within six months of the deadlock letter, or of the end of the eight weeks if no letter arrives.

You would not be alone. The Ombudsman received 32,907 complaints about current accounts in 2025/26, about 18,900 of them involving fraud and scams. We break down the numbers in our Ombudsman debt complaints report.

Which move fits you

For the wider picture on getting out of debt in the UK, start with the UK debt help guide.

Will a CCJ stop me opening a bank account?

Not a basic one, according to Citizens Advice. An outstanding CCJ should not stop you getting a basic account. A standard current account is a different matter, and a poor credit check can lead to a refusal.

Can I open a bank account if I am bankrupt?

Possibly, but not easily. Your bank may freeze or close your existing account when it hears about the bankruptcy, and it decides, not the official receiver. You can apply to other banks after the bankruptcy starts, though a standard account is unlikely. A basic account, a credit union account or a prepaid card are the usual fallbacks.

Can I get an overdraft on a basic account?

No. With a basic account you cannot go overdrawn and there is no cheque book.

I owe my old bank an overdraft. Is it safe to open a basic account at the same bank?

It can be risky. If the new account is with a bank in the same banking group as your old overdraft, the bank may use money in the new account to pay the old debt. Open it somewhere outside that group.

Do I need loads of ID?

You usually show two documents proving your name, date of birth and address. If you cannot, the bank should accept a letter from someone responsible who knows you, like a GP or teacher.

They refused me and would not say why. What now?

They do not always have to give a reason. Ask whether they offer a basic account, then complain through the bank’s procedure. After eight weeks, or a deadlock letter, you have six months to go to the Financial Ombudsman Service.

Check if a DRO or bankruptcy could apply

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