New terms and conditions of the Co-Operative Bank are set to affect IVA-holders, along with the bank’s refusal to open future bank accounts with people who have been or are, in an Individual Voluntary Agreement. The action will take effect from 16th September this year.

The bank, who already closed their doors to bankrupts in September 2012, revealed their new policy earlier this month in a change of terms and conditions which they sent out to their existing customers. In it, they stated:

“It is a condition of having a bank account with us that you are not made bankrupt or enter into an IVA after you have opened your account. If you are made bankrupt or enter into an IVA after you open an account, this is a serious breach of the terms of this agreement and we can close your account immediately…”

In response to the decision by the bank, David Mond, Chairman of the Debt Resolution Forum, posted online:

“This is appalling. I was at the IVA Standing Committee meeting last Tuesday and the Co-op Bank have a representative there who never mentioned this.”


The move comes after the bank was revealed to have a £1.5 billion hole in its finances, and downgraded to “junk” status by rating agency Moody’s. It’s deal to buy 632 branches of Lloyds TSB also fell through earlier this year.

The bank accounts suitable for IVA and bankrupt customers do not generate much revenue for banks, as they cannot cash in on overdraft charges, late fees or interest on credit, making many high street banks reluctant to promote them, some even going as far as hiding their existence unless asked by name, even if the client has been rejected for current accounts.

Basic bank accounts are an essential way in which people who have experienced serious financial issues organise their money – allowing them to save, pay bills and receive wages, when a current account is unavailable. They do not require a credit check and do not provide any credit or finance.

IVA-friendly bank accounts such as Secure Trust still provide opportunities for people looking to fully rehabilitate their finances.

Over 13,000 IVA cases are currently supervised by Harrington Brooks, so if you are worried about your financial situation, get in touch.