Overdrawn bank accounts & Ch. 7

[meritman]

Unfortunately I have 2 bank accounts (checking) that became overdrawn and total about $2000 now. Would declaring Ch. 7 allow for those debts to be forgiven? What would that do in terms of myself ever getting another checking account again? Thanks to anyone for their help.

[Dawn1970]

The overdrawn checking accounts can be discharged in a Ch 7 as long as you list them with your creditors. I had an identical problem. My name was on two checking accounts which were in the red with overdraft charges and I included them both in my BK 7. If there are any unpaid checks from these accounts, I would be sure to include whomever you wrote the bad check to in your list of creditors also.

As for getting a checking account after BK, I still have questions about that and coincidentally, just posted one. :o

[meritman]

O.K. in every state?

Thank you very much for your help. How can I tell if this will be o.k. in a certain state/region? Also, do you have any websites that I can access to view information on Ch. 7 income limits, exemption rules, etc. for a specific state?

[HHM]

The chances of getting a checking account after discharging overdraw accounts can be slim. Overdrafts, returned checks, etc, get reported to ChexSystems and/or Telecheck which are like credit reports for banks. If you get reported to those systems, it will be very difficult to get a new checking account.

If the overdraft balance is small, I recommend that you bring it current and then file BK if you want to have a checking account. However, your bank may keep the account open, it just depends on their internal policy.

[Fallout]

I have a question about overdrawn bank accounts as well. My Mother declared chapter 7 a few months ago and everything was going well until she got a letter this morning from her old bank stating that they wanted her to pay the remaining balance on the overdraft, about 500$, in ten days or they would take her to court.

She listed the account on her list of creditors and she started making the payments on her bankruptcy in august. I have a few questions.

1. Can they really take her to court to get the money? She did declare bankruptcy and did list them as a creditor.

2. Is this probably just a red tape problem at the bank? Did someone just screw up and the left hand didn't know what the right hand was doing?

3. Is there anything she can do to get the bank to leave her alone?


Thank you for any help you can give me.

[HRx]

Hi,

Just tell your mother to mail the bank a copy of her discharge paper and creditor schedule. Mail these documents to the bank's decentralized collection department, and to the manager of the local branch. Be sure your mother includes a copy of their collection letter too. Your mother may also want to include a typed letter instructing them to confirm reciept of the documents by sending her a letter stating so. She also want to keep abreast of her credit report too, just to ensure that the bank doesn't submit updated derogatory remarks to the CRAs.

Good Luck!