Can they freeze my checking account money?

[Karen2005]

OK, this was probably a stupid thing to do on my part, but it's done and now I need to know if it will cause repercussions. I had $75 in my checking account that I withdrew right before I went to the court and filed chapter 7. So there was and still is only about .25 in my account. I owe the bank $300 on a line of credit which I am attempting to discharge. I know they can freeze the funds that are in the checking account on the day that you file, but can they freeze your account AFTER the day you file for the amount that was in your account the day you filed? Do I have to worry that they will freeze the first $75 that gets deposited to my account? Thanks.

[sunshine08]

I wouldn't use that checking account until everything is done, open another one. You should have done that before you filed because you owed that bank money.

[Karen2005]

Actually I did open another account at a different bank, but I've had the same checking account for almost 2 decades so I'd like to keep it. It also has everything I want as far as features and lots of availible ATMs. The new bank doesnt. The research I've pulled from the internet says the following:

"If the bank or credit union at which you have checking or savings accounts is also a creditor (i.e. you have a loan, credit card account, or overdraft protection with the bank), then it is possible that the bank will put an "administrative freeze" on the funds in the account on the date the bankruptcy petition is filed. Such an administrative freeze will cause checks that have not cleared the bank to bounce. Therefore, you should open a new bank account with a bank whom you do not owe any money prior to filing bankruptcy and cease checking activity in the old account several weeks prior to filing the petition. It is not necessary that you close the old -account, but you should remove all but a few dollars from the account.

If your paycheck is automatically deposited to the account, you do not necessarily have to change the deposit. Funds that are deposited into the account after you file the bankruptcy cannot be frozen."

The above clearly states that they CAN freeze the account ON the date that you file, and they CANT freeze any money deposited AFTER your filing date. So that leads me to believe that my old checking account would be fine to use after the date of filing. If this is NOT the case somebody please speak up!

[ODDBALL]

Karen2005 - I think that if you owe that particular bank money, as you state that you owe $300 on a line of credit that you plan to discharge, then they may indeed freeze your account or maybe even close the account. I'm not a guru on this, just posting on what I've heard or read. Your plan is to discharge a debt with them, and they may try to collect what they can. If you go back and read the old post, you will likely find answers to your questions. I belong to a credit union, and when I called to see if my bk-7 would have any affect on my accounts (checking and savings), I was told that as long as I didn't have any loans that I was planning to discharge in the bk-7 that I was fine. You might want to change you direct deposit as well. I have read through the posts on this site that creditors have actually went after monies in accounts to get paid. Just my 0.02

Good Luck!!!!

[originalhealer]

I agree. I would pay the $300 that you owe and not even include the bank as a creditor. But, it may be too late for that. If so, then definitely change your direct deposits to another bank until the coast is clear. Yeah, I know what you read, but companies break rules all the time. The most they'll say is, "Sorry, but since you owed us money anyway, we have a right to those funds..or, sorry, but it will take 3-4 weeks for us to clear up the problem and release your money" or some other BS.

[Karen2005]

Odball and Healer, thanks for the replys.

I *have* searched this forum and several others for a set answer and it seems to boil down to what OrigHealer mentioned: Dont trust the bank to follow the rules, even if the law would cover me in this situation. So I'm going to put a couple of bucks in the old account to keep it open as I've already listed them as a creditor, then I'll use the new checking acc. until the discharge. Once the discharge (crossing my fingers and toes) goes through then i'll go back to using the old account. I cant imagine that the bank(not a credit union) would still be legally entitled to a set-off/freezing AFTER my debts to them are discharged! If I'm wrong, lol, PLEASE chime in! Many thanks.