By Jason Theodorou

People facing bankruptcy are facing exclusion from banks, according to an advice service. The charity Citizens Advice said that most banks refused to let bankrupt customers open a basic bank account which did not have a credit facility, although there is no legal basis for this strategy.

The charity suggested that this meant people were forced to carry cash, could not get direct debit discounts on their bills, and precluded such customers from carrying a cheque book or getting access to credit.

'Great progress has been made in improving access to bank accounts for many groups who were previously financially excluded' says Gillian Guy, chief executive of Citizens Advice. But she cautioned that there are still groups, such as undischarged bankrupts, who cannot open a basic bank account.

"Most people take having a bank account for granted, but without access to one, basic tasks such as receiving wages or benefits and paying bills can become huge and costly obstacles to overcome, particularly for people who are often at a vulnerable point in their lives. Just because someone is made bankrupt it does not mean their life stops."

There was a 249% spike in the number of people going bankrupt between 2000 and 2009, with the most common reason given that people had suffered an unexpected change in their circumstances, such as job loss, illness or an accident.

Those who did not have a bank account depended on friends and family, leading to dependence and the need to carry around large quantities of cash. It also precluded them from benefiting from discounts that could be made by paying pills via direct debit.

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