I hadn’t thought this through it seems.
Being hand wringing leftist scum we have joint and credit cards with the ‘ethical’ banks. ALL our bills get paid from the joint account and it would be a proper saga if they went belly up and I defaulted that month.
We end up every month with about £3 so I’m not worried about savings (if only) but my credit record would take a hit.
Should I just bail out now?
In the highly unlikely event the Bank would be allowed to continue to trade to the point of oblivion, the FSCS would have your money back within a week (usually) obviously this would be a total pain in the arse but – but not life ending, as far as I can recall this hasn’t happened in the UK, not in the last 80 years or so anyway – we learned during the Great Depression that allowing Banks to fail and Joe Public losing their money is far more harmful than propping them up.
In regards to your creditors – to ‘Default’ you’d need to miss payments for at least 3 months, you could in theory get a reminder mark on your credit file which is harmful to your credit history – but 2 factors at play here –
Firstly, is that an issue you sound heavily exposed already, you could have a perfect history but if you’ve not got anymore money to pay anyone back, no one is going to lend to you? But that’s me just being mean and I like to downplay the importance of ‘credit scores’ it’s not a measure of how good a person you are.
Secondly creditors won’t and can’t punish people for things they cannot control as long as you don’t bury your head in the sand – it would be a pain but if they did fail you’d just need to phone up your creditors explain what’s happened and that would be the end of it – they’ll be jammed with other Co-Op customers doing the same thing, but if they wanted to check, they’d only need to see what account your payments are made from – they’ll give you at least a month to sort it given the circumstance because they know they would be brutalised if they didn’t, and well it’s good business.