Why moving first matters
Once an overdraft is defaulted or included in a formal debt solution, the bank will close the account. If your salary, benefits or standing orders are going through that account, you can be caught with no banking facility at short notice.
Setting up alternative banking before this happens is a straightforward precaution.
Right of set-off
Banks have a legal right of set-off — they can take money from one account you hold with them to pay debt on another account with the same bank.
This means if your wages arrive in the current account you owe an overdraft to, the bank can take those wages towards the overdraft.
Moving to a bank you do not have debt with removes this risk.
Basic bank accounts
Basic bank accounts have no overdraft, no chequebook, but include a debit card, direct debits, standing orders and online banking.
They cannot be refused solely on credit history. All major banks (Barclays, HSBC, Lloyds, NatWest, Santander, TSB, Nationwide, etc) offer them.
Some banks make application difficult by requiring in-branch appointments — some are more accessible online.
The switching process
The Current Account Switch Service (CASS) moves your direct debits, standing orders and salary payments automatically. It takes seven working days.
You can switch to a basic account through CASS. Some basic accounts are excluded from CASS depending on the bank.