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Questions about getting a checking account after discharge

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  • Questions about getting a checking account after discharge


    I'm hoping someone can explain how this works and what I need to do with my own personal situation.

    When I filed for bankruptcy, I wasn't negative on my checking account. However, I did have a loan through the same bank that payments were taken out of the account every month. Once they received notification I filed for bankruptcy. They started offsetting the account daily, returned a check, and it was just a big mess that took over a week to get them to stop offsetting... and by then there were fees and penalties and of course the monthly charge. They didn't close it out until my bankruptcy was discharged and by then there were a lot of fees and they had jumped it up.

    So now it has been closed out and I'm sure has been sent to Chex systems. I would like to get a new checking account. Should I try to pay off this old balance and if I do would I be cleared from Chex systems? And my second question is this: since these charges happened after my filing date and before my discharge am I responsible for paying them or were they discharged? Is this considered debt that the bankruptcy wouldn't discharge? They wouldn't let me close out the account at the time because of the loan attached to it. The only way I could close this out was to continue to let the charges accrue until they eventually closed it out themselves. I filed pro se so this is one of those questions I'm not clear on. I'm discharged now but not sure if Chex system would clear me out if I paid off this old balance.


  • #2
    That's a tough one. I have a bank account that I'd intended on closing myself before BK but didn't. I had credit cards with the same bank .I had less than 5 bucks in it but it's still open (the checking account). I've read that banks were not allowed to set off accounts they knew to be the result of bankruptcy, but credit unions could.

    It seems kind of unfair for you to have to repay debts that you never authorized, and for the bank to take your balance. First i would obtain a copy of your chexsystems report and see what's on it and then go from there. It may be that it wasn't reported.
    chexsystems like the credit bureaus does not have to remove correct information. If there's derogatory information about you that's correct it can stay there. If you pay it off it will still show, only that it's been paid. Chexsystems only has a 5 year history except for fraud (and I hope they have a lifetime history on identification used for account openings) .

    Best of wishes


    • #3
      Is it a violation of the stay to seize monies beyond what was available and then charge fees for doing so?


      • #4
        Originally posted by Maria80386 View Post
        Is it a violation of the stay to seize monies beyond what was available and then charge fees for doing so?
        Whether or not a creidtor can charge fees is based on your contract. Many banks charge fees for overdrawing an account when the account doesn't have money "beyond" what is available. That is normal practice.

        Otherwise, I don't really understand what you are asking. Anything that you owed prior to filing bankruptcy, and any expense related to the creditor collecting on that (even post filing), is dischargeable and would be discharged upon entry of the discharge order. In other words, you could owe some bank $1,000 from overdraft fees. They could tack on more daily fees for not resolving the balance. You could file on March 1. They tack on more charges after March 1. All of those charges, including the post-filing charges after March 1, are dischargeable.

        Could you imagine filing for bankruptcy and surrendering your home on March 1. The bank forecloses on June 1 and the sues the debtor for a deficiency balance of $100K? That would mean that bankruptcy is worthless in protecting "antecedent" debt. Fortunately that's not the case and the bankruptcy would preclude the creditor from collecting the $100K from the debtor personally.
        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog

        I am not an attorney. Any advice provided is not legal advice.


        • #5
          If the amount gets discharged because the bank's offset against the checking caused an overdraft, would they then get to report the severe and unpaid overdraft to checksystems or whoever to claim I'd overdrafted my account, didn't pay tem, and thus be prevented from opening a new account?

          this is like the bank retaliation for my bankrupting the unpaid credit card, "you filed on us so we're going to get you but good," maybe even filing criminal fraud charges for passing a bad check? The check was valid and money was there, until the bank took its punitive action.

          i know the moral is don't have an account where u owe money when filing, and don't have any outstanding checks, nor any amount over state exemption in account, but my above questions still have ke wondering if my credit union could do an ach against previously connected outside accounts, thus overdrafting multiple places to get their money when I file.


          • #6
            The bank can report it to Chexsystems and it's usually not vindictive but simply automatic (the computer sends it to Chexsystems). However, Chexsystems is very easy to deal with in bankruptcy. You just file a dispute and send a copy of the discharge order to Chexsystems and they wipe it clean. I had an issue with a checking LOC from a national bank and they had a negative entry in Chexsystems. When I went to open an account in 2011 or so, I was denied a new account, but I fixed Chexsystems rather quickly and was then allowed to open the account.

            For what it's worth, I had a lot of outstanding checks a few days before I filed and they caused the overdraft LOC to be used. Other than the slight hiccup with the "automatic" reporting to Chexsystems, I haven't had any issues.

            Your credit union, or any bank, cannot levy another bank account without a court order. I had that fear as well. My credit union did take the automatic payments from a third-party bank after filing, but that was also quickly fixed and all the money returned within days of notifying the CU that there was a bankruptcy filed. So, automatic payments can be problematic and you need to shut them all down before filing. Even if an automatic payment does go through after filing, you can recover the money.
            Last edited by justbroke; 03-04-2018, 03:07 PM. Reason: used can rather than cannot
            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
            Status: (Auto) Discharged and Closed! 5/10
            Visit My BKForum Blog: justbroke's Blog

            I am not an attorney. Any advice provided is not legal advice.


            • #7
              Thank you!

              i will be certain my bank gives me a full new account number without any ACH allowed right before I file, thus no one else can levy the pennies I'll have left in there.


              • #8
                You need to speak to the bank's bankruptcy department. As the loan was taken out prior to filing, the debt--including any bank fees incurred as a result of this contract--is deemed discharged. You do not have to pay this balance, and the bank cannot legally demand repayment. Courts have held that negative reporting to any credit bureau--including ChexSystems--of a discharged debt is a violation of the discharge order. The bank does not want to be found in violation. I am sure that a friendly visit to your local branch will result in a referral to the bankruptcy department, who will clear this up for you.

                Once the bank account is closed and zeroed out, then you can open a new account somewhere else. As long as you don't plan on taking out any loans, banking at a credit union is vastly superior to banking at a corporate-owned bank.


                • #9
                  Thanks so much. This thread has been so helpful! So I guess now I've just got to find a bank that gives second chance checking accounts and apply and go from there.


                  • #10
                    It doesn't actually have to be a "second chance checking" account, and many of those type of accounts are laden with fees, or require evidence that you have repaid your previous financial institution(s).

                    Upon discharge, your previous bank is required to zero out the balance owed, and remove any derogatory reporting--including ChexSystems. If you contact the bankruptcy department, they will probably do this automatically.

                    Regardless of what your previous bank chooses to do or report, if you mail a copy of the discharge order to ChexSystems, they will wipe your file clean, as if you never had a derogatory account anywhere. They will then send you a new copy of your ChexSystems report proving this.

                    After your ChexSystems file is cleared, then you can open a regular account at any bank or credit union.


                    • #11
                      Awesome, I didn't know this. I thought it would have to be a second chance checking. I ordered the free copy of my ChexSystems report so I'm going to wait and see what that shows. I guess I should be looking to see if the old checking account shows a balance. If so, I'll send my discharge order in. Thanks for this info.


                      • #12
                        Just to update I did get my free ChexSystems report. They had reported an unpaid balance to ChexSystems and it was sitting there marked as unpaid with nothing mentioned about the discharge. So I have sent off a dispute and a copy of the discharge order to them. Thanks for all of your help.
                        Last edited by bankrupt3000; 03-14-2018, 03:58 PM.


                        • #13
                          Additional update:
                          I still haven't got this resolved. A few weeks after I sent in the discharge I received a letter from ChexSystems refusing to take this off because the bank reported it as closed after my filing date and they are not considering it part of the bankruptcy. I've decided I'm going to pay the bank off as I don't want this to keep popping up in my future from collectors, etc, though the account was included in the bankruptcy. Before I filed the bankruptcy the bank refused to close out the checking account because I had a loan attached to it and after filing they continued to add fees to it for a few months until they closed it out right before the discharge. I'm also going to send in the form that lists this debt on my bankruptcy to ChexSystems as well, though I'm not sure if it will do any good or not.


                          • #14
                            If all else fails, contact your lawyer or the court to resolve a violation of your discharge.


                            • #15
                              No! Do not pay the alleged debt! Doing so does not guarantee that you will be able to open a new account without hassle, because the alleged debt might still remain on your ChexSystems (or Early Warning Systems or Telecheck) reports, perhaps with a notation of "paid". If you are certain that the alleged debt stems from a loan taken out before you declared bankruptcy and/or from overdrafts which took place before you filed, then you need to pursue this blatant violation of the bankruptcy discharge!


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