Checking accounts during BK....

[inseriousdebt]

I was wondering what people do with their checking accounts during bankruptcy when filing a chapter 7 if you have no problems on the account (no overdrafts weighing you down..etc...)? I know that the trustee is able to take things from you, and I am wondering how to go about this? I don't have any money in there at the end of the month after paying bills anyway from they to take... (just enough so it doesn't go under), but if you have no exemptions from your state on these things...what do you do? I really don't want to have to do money orders or something similar. Are there any other ways of going through this? I am just kind of lost on this and confused on this as always!

[notme]

I had the same problem too. We had enough money to pay are mortgage and utilities ect.. but after that there isnt much left .Are att. told us to stop all direct deposits until the 341 meeting. I have to do money orders which is a hassle but necessary. She told us that even though it is to pay bills they dont see it that way. She also told us to keep it open but we shouldnt have more than $50

[13inOR]

One thing I do know is that you shouldn't close out your checking account because after BK you most likely won't be able to open one anywhere.

Doing the low balance and money order thing is probably wise however, especially if you are filing chapter 7.

Our attorney told us, "if you don't like your bank and want to switch, do it before you file or you won't be able to later." So evidently that can be a real problem.

[poorme]

I kept my BofA account and direct deposits all the way through my ch 7. I was a no asset case, and that may make a difference. My financial statement showed there was none left over also. However, it is the trustees option to send a notice to your bank. The bank did nothing and necer sent me any communications regarding my filing.

You might ask your bank about their policy and how they will treat you during and after your case. Particularly if you've been with them for awhile.

If you have to change banks after discharge and they deny an account, you may have to speak directly to the branch manager and 'splain your case. Approval CAN be had...you just can't assume it will be automatic. I'm looking at a potential relocation soon to a city where my bank isn't, so I'm somewhat worried about the new bank scenario also.

[SinkingFast]

I read on here when I first joined, one of the "older" been thru it people suggested check out banks in advance of filing. Find a new bank you're interested in doing business with. Then, the day after you file your BK petition, go to the new bank and open an account there. That way, the BK won't have had time to show up on your Credit History yet and you can still open a new account.

We've been doing the Money Order and Cashier's Check thing for a while now. Yes it is a hassle! But I like that the funds immediately disappear from our checking acct. Our Landlord was taking weeks to cash our rent checks. If I wrote her a rent check toward the end of the month, then filed the beginning of the next month, and the Court froze our acct for whatever reason, we could have checks bouncing all over the place. Most especially our rent check. Not a pretty thought.

I don't know that the Trustee will freeze the acct. I don't know if the Trustee will sieze the funds. I just wanna make sure there isn't much funds available and no checks floating around if that does happen.

[inseriousdebt]

During bk.....

I basically was trying to see what to do with your account as you are going through bank. if your account before and during is in good standings. I want to keep it open of course, but I want to know the most sensible thing to do whether it be..start now and don't do direct deposits anymore..and cash the checks and turn them into money orders for bills each month? or keep our paychecks direct deposit and keep paying bills this way? I am sure our attorney will tell us too, but just thought I would see what people have done whom have recently filed.

[poorme]

If you're using a local, experienced bk attorney, he/she should be able to give you advice as to what your court's trustees tend to do. Personally, I think it's best if you can keep using your account without fear of the funds disappearing. Trustees understand that people need to have bank accounts - unless yours is overflowing with flush funds, I doubt they'll even care. That's why the financial statement is so important, it's a picture of your income vs, outgo.

[SinkingFast]

I read about the stop direct deposits, use money orders and cashier's checks things here. Thought it made good sense to have control of the money flow and did it.

We haven't closed our bank acct, we just have better control over the flow of funds in and out.

Only ONE attny told us about that strategy. We Consulted with 10 attnys. Only ONE out of the whole bunch told us to stop direct deposits and use money orders/cashier's checks. All the rest just gave us the same old answer we heard for every other question we asked,.......... "It'll be fine!"

[aa06a47]

One of the things that bothers me concerning keeping my current checking accounts is that I owe money in the form of credit card debt to both of them. The credit union account is for only about 300 bucks, and I plan on paying this off as soon as I get paid. These are items I have charged this month to live until the next pay day. The BOA account I have, well, they will be pissed, and I don't want a nickle in that account on the day I file.

My opinion, if the bank will lose money when you file, it will be best to not have any money in there. Even though they cannot legally take it when you file, (I don't think anyway), it could get your funds locked up, even if breifly.

[Rona123]

As I understand it, you can do whatever you want with your checking account after you file, and it makes no difference to the trustee. The only thing that matters to him/her is the status of any checking/savings accounts on the day that you file, and that day only.

As for having credit AND checking accounts with one bank, that can be a problem. There is apparently something called a "cross-collateralization" agreement that allows those banks to claim funds in your checking account in order to recover what they might be losing if you are including a debt to that bank in your BK. I don't know the success rate for such claims, but I do know that it's possible.

As such, the best thing to do in that case is to open up a new checking account somewhere else. I didn't open up a new checking account before I filed to keep things from being too complicated. What I did do, though, is go and open a new account on the day after I filed BK7. This way you don't have the complication of another checking account on your records for BK, but it's so soon after filing that most banks won't yet have any record of your filing.

Good luck!
Ron

[annikasaunt]

I have a loan at my long time bank and I left a little bit of money in that sav/check acct and then I opened a new account at another bank. So, technically I didn't close any accounts! Once I stopped paying on my bank loan I was afraid they would freeze my accounts. Atty suggested this anyways. He told me that they probably won't take any money from the account but that they could freeze it and make life miserable if I had any activity there.
I try to have as little as possible in the bank. I pay cash or money orders for everything. Once we file I will start a little savings fund for all the stuff I'm supposed to be paying cash for now! Hopefully by the end of the week we will have filed...

[so-beyond-broke]

I have a very outstanding credit card with Chase but it was First USA then Bank One took over and then they merged with Chase. When it became Chase, my acct was already closed and has been in collections. I have a Life Line checking acct with Chase - my son's SSI goes in there (has for years) and my direct deposit from work goes in there too. When I file BK I will try and get this debt discharged, could they freeze my Chase checking account? After all the credit card company knows that I have a Chase checking account. When I login to my checking acct, the outstanding balance for the CC is on the same website for all accts under my name. Should it be something to worry about? I want to open an acct with Washington Mutual anyway before filing- they offer better deals.

sbb

[Rona123]

SBB,

Just to play it safe, I would certainly consider opening a new account at the time that you file. While it's not certain that your current checking account will be frozen, why take the chance? I would recommend having all your direct deposit accounts changed over so that you receive paper checks instead, that way you can control how and where that money is allocated, as well as how much is in your account on the day that you file, since the trustee could technically claim moneys in your checking account on the day of filing.

As I mentioned above, what worked for me was opening a new account on the day after filing, so it doesn't show up on the BK, and the BK doesn't yet show up when trying to open a new checking account.

Good luck!

[SinkingFast]

Getting SSI changed over can go really quick as well. When Mom did it here, we were at the bank. The bank officer got the local SS office on the phone, told them who she was and what she was wanting to do. Then she handed the phone to Mom, the Soc Sec rep spoke with Mom. Asked her a few questions and then asked to be given back to the bank officer. The bank officer gave the Soc Sec rep the routing number and new acct number. That was in the middle of the month. Amazing, but Mom's next SSI deposit went right into the new bank acct.

So, it might be a bit of a hassle to list 2 bank accts in your pre-BK paperwork, but you might wanna get another acct open and have the SSI redirected right at the time you file. That way, the next payment from Soc Sec goes to the new acct that will be liquid, and not the old acct, that Chase may freeze.

[so-beyond-broke]

Sinkingfast-

But right now both of my checks (wages and son's SSI) go into that 1 checking account. I wanted to originally leave the SSI in the chase acct because that's what I had been keeping it direct deposit for years. It's only after my personal checking acct closed that I placed my pay check into the same acct for the last 2 months. I wanted to try and put my pay check into a new acct, but I might just move both checks into a new acct. Chase is notorious for fees and I want to do my banking elsewhere. But first I must see if I can open a new acct. I may be in chex systems for a NSF that eventually caused my previous acct to close. However, it doesn't appear on my CR.

sbb

Getting SSI changed over can go really quick as well. When Mom did it here, we were at the bank. The bank officer got the local SS office on the phone, told them who she was and what she was wanting to do. Then she handed the phone to Mom, the Soc Sec rep spoke with Mom. Asked her a few questions and then asked to be given back to the bank officer. The bank officer gave the Soc Sec rep the routing number and new acct number. That was in the middle of the month. Amazing, but Mom's next SSI deposit went right into the new bank acct.

So, it might be a bit of a hassle to list 2 bank accts in your pre-BK paperwork, but you might wanna get another acct open and have the SSI redirected right at the time you file. That way, the next payment from Soc Sec goes to the new acct that will be liquid, and not the old acct, that Chase may freeze.