Question regarding unemployment and bankruptcy

Hi there,

I made this community account to ask this question directly to the uses of the Monzo banking app. I’ve already emailed the official support email however, I would like to get opinions from the users themselves.

Unfortunately, I recently lost my job due to circumstances that’re out of my control. Further to that, I will now likely have to look at declaring bankruptcy for the first time in my life.
After talking to an insolvency practitioner either an IVA (eligible based on only if I manage to find employment again in the next month) or bankruptcy are my best options going forward.Once either of these happen though, I was informed that your current bank acc gets frozen. So, it was recommended to join a new bank.

Monzo has been recommended to me by so many people that I had to check it out, and what I’ve seen is very impressive. My question is: When I try to sign up, during the financial details section, it asks for income, outgoings and employment status. Obviously, I would have to enter “Unemployed”, £0 income, £0 outgoings. Would this jeopardize my chances of being accepted? Or am I still very likely to be accepted?

Apologies for the long post.
Thanks and kind regards.

Hey there,

Sorry to hear about this. Someone else in the forum is going through the same thing as you, so rest assured you are not alone. You can see their post here Bankruptcy advice to see if it answers any of your questions :slight_smile:

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Hi. To the best of my knowledge you can open a Monzo account if unemployed. You just need a U.K. address.
I think you can open any basic current bank account if unemployed. The bankruptcy would be the blocker. Monzo accept bankrupt customers.

Are you getting benefits of any kind? If you are, use those figures for your employment.

I would go ahead and open your Monzo account, they only do a ‘soft’ credit check anyway.

Going into bankruptcy really is a bitter pill to swallow.
I wouldn’t do an IVA unless you need to protect assets or a vocation.

Sending lots of luck to you at this tough time.

V.

This is bad advice.

Benefit figures shouldn’t be reported as employment figures, there should be a separate entry for this, in most cases when selecting unemployed.

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Hi there, V

Thank you for your response. Talking to people in a same or similar circumstance certainly helps…
I did enter “Unemployed” on the setup, however it still asks you to enter “income” so entering “0” would be ok? As in, it wouldn’t deny me based on that? I’m overly concerned but I really want to open this Monzo desperately as it would be such a good first step in navigating this difficult time in life.

No benefits currently, I will be applying soon if I don’t manage to be successful in two upcoming job interviews.

“Going into bankruptcy really is a bitter pill to swallow.” Amen to that, V. One never really expects it. I read your thread and you mentioned it was down to a divorce, if I’m correct? Mine was down to a separation as well, sure ain’t easy.

Wish you all the best, and again thanks for the help.
Kind regards,
Sean

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Thank you for your reply as well, Carlo. Much appreciated.

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Yes, mine was due to divorce. All the debts were in my name. Frustrating because I could get a fair bit of credit due to a good credit score. Oh well, I’m back to basics again.

I’d just enter ‘0’.
I didn’t mean to suggest you enter benefits as your employment figure. It should have said income figure! Just finished a night shift is my excuse :sleeping:.
Anyway, it’s a moot point for now.
Just input ‘0’ and go from there. Hopefully it will be fine.

Just for info. I managed my debts on my single wage for two years. I then went with the IVA option but payments were still high and when factoring in I had nothing to lose asset wise, that the IVA was a minimum of 5yrs against a possible IPA for 3yrs it was a no brainer to file for bankruptcy.
IVA and bankruptcy have the same impact on your credit file for 6yrs so for my circumstances I’d rather go bankrupt and pay very little or nothing at all than be tied into the IVA.
IVA company wanted £320 per month. Bankruptcy IPA want £69 per month. And that’s not even ‘surplus’ cash. They’re taking the tax I’d pay rather than HMRC having it and that only lasts until end of tax year.

It can only get better from here. I’ll not marry again :sweat_smile:

V.