What becomes of your bank account during bankruptcy?

[LadyInTheRed]

Just one question: An account cannot be seized or levied without a judgement, right? I don't owe money where I bank, and I'm hoping to be able to file C7 before any legal action is so much as threatened. I've considered taking my name off the account to protect it (as it is jointly owned, by both me and my husband, who won't be filing with me), but I don't want to do anything that would look suspicious in the eyes of the trustee. I'm just concerned about it being seized.

Right, a creditor needs to get a judgment before it can levy your account.

Taking your name off the account could be considered a transfer to your husband. Better for him to open a new account in his name only and spend the money in the joint account to pay your living expense until it is empty. Be sure to close it once it is empty so account fees don't cause an overdraft.

[lillymarlene]

We closed our accounts and opened a new one that had no ties to any of our debts.

Ditto. Best and safest thing to do. My credit union, where I had a small revolving line, cancelled my debit card and closed my checking account when they were notified of my BK. Then also, it's probably good to be very cautious to who you allow to get any information about the new account. A few years ago, I made a small payment over the phone to one of my business vendors with a credit card. Then he helped himself, without my permission, taking money each month out of that card until the bill was finally paid. I probably could have fought him over it, but at the time I felt it wasn't really worth pursuing.

Since then, and also of course because of my BK, I've become super cautious. I will never have a bank account (well a significant one anyway) where I have a loan. Then, with certain people, I will go out of my way to pay by money order, I feel the less information I'm handing them the better.

[iswmle]

We closed our accounts and opened a new one that had no ties to any of our debts.

Exactly what I did. Didn't have a problem with opening up an account with another bank and I moved everything as soon as the decision to file was made.

[Guest123]

We closed our accounts and opened a new one that had no ties to any of our debts.
We had a credit union that financed a car and a couple of line of credits, a few of our debtors had our bank account information as we paid them either online or had auto withdrawl.

[lotsahats]

Just one question: An account cannot be seized or levied without a judgement, right? I don't owe money where I bank, and I'm hoping to be able to file C7 before any legal action is so much as threatened. I've considered taking my name off the account to protect it (as it is jointly owned, by both me and my husband, who won't be filing with me), but I don't want to do anything that would look suspicious in the eyes of the trustee. I'm just concerned about it being seized.

[fileda13]

I had a joint checking account with my wife, and I was depositing my self-employed business checks into it. I opened two DIP business accounts (I have 2 self-employed business names) to deposit my self employment income into, and take distributions out and transfer to the joint account. I am still using the joint account for paying bills (my attorney said this was fine).

[DirkDiggler]

What about a Credit Union where we have a car loan that is current and we plan to do a ride thru on? Should we move our $$ elsewhere for the time being? We also have overdraft LOC on our checking but its current and only at a $100-200 balance usually....

[JackBondLove]

I had about $50 in my accounts (I had like 8 accounts, with one being an account that had a minimum of $25, which since I was in default on the associated line of credit, I could not liquidate!) My trustee just made me pay the total. After the discharge, I simply closed all the accounts and got checks for the proceeds. Ironically, I had opened up an account at Wells Fargo (since I was to rollover my 401K into an IRA there after the BK filing) before the filing, and had about $2 in it on the date of the filing - it did not get frozen.

As for paying the attorney, I simply withdrew the $1500 and got a cashier's check to pay him. I also had to get some work done on the house - for maintenance, not home improvement (about $2600 total) and I officially paid the contractors with again a cashier's check, or a debit (which I had to make sure was done before the filing date, even though the crew would not be coming by to do the work until after the filing!) Once the attorney announced the date, I withdrew all but $1 from my main checking account the day before.

On the day after my filing, I sent in the form to distribute my $5K Roth IRA, which took about 2 weeks before I was able to walk into my local bank and walk out with cash from that. My mother gave me a few hundred bucks to tie me over. The week after filing, I applied for Food Stamps (since it was only then that I was truly broke!) and got them going about 2 weeks later as well. (I had no unemployment coming in at that time.)

[drowning123]

Absolutely not an issue, Freddy. I did the same thing. I withdrew $1600 (in $400 increments) to pay my attorney on the day I filed.

[Pandora]

YIKES! I filed on the day I was paid but I have been withdrawing all deposits for months b/c of bank levy threat. I withdrew the rest of the money owed to my attorney on the day I filed. I wonder if that's gonna be an issue.

I dont know Freddy, I dont believe it would be an issue, however better to be safe and ask your attorney how the trustee works in that regard. Our trustee required bank statements for the previous 6 months before filing, then another the day before 341. We had to provide our lawyer with bank statements up until we were confirmed.

[jeep75]

Unless you have a credit card or car loan with the same bank as your checking/savings accounts there is really no need to do anything in regards to emptying them and closing them. The advice to do this only comes into play when you have loans or credit cards with the same bank as they can take your money to pay the debts you stopped paying.

[IamOld]

YIKES! I filed on the day I was paid but I have been withdrawing all deposits for months b/c of bank levy threat. I withdrew the rest of the money owed to my attorney on the day I filed. I wonder if that's gonna be an issue.

I don't think so - you took the $$ out paid it to atty - so IF anyone asks, you/atty shows receipt of funds!

[Freddy03]

Wanted to add that we were advised not to file until all of our bills were cleared out of our account. Reason being is because as LITR stated, you must declare the amount in your account both when you file, then again before / at your 341 (our trustee required bank statements as of the day before our 341).

We were told that even if we had checks written on the account, if bank balance showed $1500 due to not clearing yet but the register balance was $700 - we would have to declare the banks balance vs. ours.

YIKES! I filed on the day I was paid but I have been withdrawing all deposits for months b/c of bank levy threat. I withdrew the rest of the money owed to my attorney on the day I filed. I wonder if that's gonna be an issue.

[Pandora]

Wanted to add that we were advised not to file until all of our bills were cleared out of our account. Reason being is because as LITR stated, you must declare the amount in your account both when you file, then again before / at your 341 (our trustee required bank statements as of the day before our 341).

We were told that even if we had checks written on the account, if bank balance showed $1500 due to not clearing yet but the register balance was $700 - we would have to declare the banks balance vs. ours.

[Freddy03]

I haven't done anything with both my bank accts. One is a credit union that I had no other business with just a checking account and the other is just a regular checking acct. I have been using them as usual since I filed.