What becomes of your bank account during bankruptcy?

[Freddy03]

Thanks so much IamOld & ValleYum!!

Both great news and great advice. I'll probably call the CU anonymously as advised but still stop the direct deposit there at least for a while. I really like that CU but not enough to risk not being able to access my money! Maybe I should stop direct deposit all together and just sign my checks over to a family member until I see what's going to happen with my accounts.

This is why we're all so lucky this site is here, I would have never even thought of this...

You may want to check with your attorney before you sign $$ over to a family member if you are filing soon.

I had/have a CU account that was not affected by BK but I also did not have any loans with them.

[mtbjoe]

Thanks so much IamOld & ValleYum!!

Both great news and great advice. I'll probably call the CU anonymously as advised but still stop the direct deposit there at least for a while. I really like that CU but not enough to risk not being able to access my money! Maybe I should stop direct deposit all together and just sign my checks over to a family member until I see what's going to happen with my accounts.

This is why we're all so lucky this site is here, I would have never even thought of this...

[ValleYum]

Make sure you ask a "hypothetical question" - don't give your name or account info when you call the CU. Also, consider blocking your phone # using *67.

Why? I read of someone on here who called to ask something similar and their CU froze their account that very day even before they filed. Yeah, I personally would (and did) take my Direct Deposit and checking acct. to a bank where you have no financial ties.

Good luck!

[IamOld]

Joe, YES the overdraft fees are dischargable like anything else. I honestly don't know what the CU may do if you file...it may be better to get an account elsewhere just in case...


All my best wishes to you!!!

Wow, looks like I may have headed in the wrong direction!!

Currently I'm in so much debt with WF that I feel like I may actually be considered their property at this point. The original question I was looking for answers to was around overdraft fees causing a negative balance in our WF checking account when we file (Ch 7). We haven't been using the account but it's at almost -$1000 just in fees over the past 2 months and I wanted to see if this will get discharged after we file.

We just switched our direct deposit from WF to our CU which we've always used for car loans and we have a small one there now which is current and will remain so. After reading this thread I'm not so sure that was a good idea especially since I do have that loan with them.

We were hoping to file in the next week or so but I may need to straighten this out first but of anyone has an answer to these questions (especially the first one) I'd really appreciate it. I'm also going to call our CU to see what they say.

Thanks!

[mtbjoe]

Wow, looks like I may have headed in the wrong direction!!

Currently I'm in so much debt with WF that I feel like I may actually be considered their property at this point. The original question I was looking for answers to was around overdraft fees causing a negative balance in our WF checking account when we file (Ch 7). We haven't been using the account but it's at almost -$1000 just in fees over the past 2 months and I wanted to see if this will get discharged after we file.

We just switched our direct deposit from WF to our CU which we've always used for car loans and we have a small one there now which is current and will remain so. After reading this thread I'm not so sure that was a good idea especially since I do have that loan with them.

We were hoping to file in the next week or so but I may need to straighten this out first but of anyone has an answer to these questions (especially the first one) I'd really appreciate it. I'm also going to call our CU to see what they say.

Thanks!

[IamOld]

Pansy I'd open the account then before ANY possibility of any chex reporting...as long as you disclose/list it isn't an issue.

[PANSYFACE]

I have a credit card, LOC,mortgage, checking and savings with Bank of America. When the s**t hit the fan - they froze my line of credit even though I was paying ontime and through a debit. the credit card was chrged off and sold. Then the last judgement holder
took money out of savings (big 1.94 that they got) and caused my checking to be an overdraft. If I didn't cover it it waould have cost me $70 in service fees. This is why I went on a search for bank that my husband could open an account at - no go.
The only place it seems that doesn't pull credit report is a CU 4 miles away - looked at the online app and there is a box for chex systems but nothing else.I have two business accounts not associated with any credit etc but I am out of business -would keeping them be considered fraud?

I never had anything that I didn't cover but the LOC will be included in bankruptcy. Would that be reported to chex systems?

I need an account for auto debits for husband's business. I can't close BOA because of the LOC - the creditor can go in as much as they want until it is closed. Obviously - I must file asap - lawyer is fully retained. It will be a LOOONNNGGG weekend of work but I have to do it.

[lotsahats]

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.

Okay, one more question about that...

When the time comes for me to file, will his new account be considered one of my assets? I know it would be protected from being levied in a judgement, but I wouldn't think that not having my name on an account that I am living off of would stop the trustee from wanting to know about it. They will, after all, need to know about my husband's income. How does that work?

[obwnlink]

What will become of my checking account? Will I still be able to use it for regular, necessary transactions, like buying groceries, or paying rent? Or will it be (for lack of a better word) seized?

I had a checking, savings, two credit cards, and a HELOC with B of A. I also have a checking account with Wells Fargo (it was my play money fund). B of A closed all my accounts after I filed for bankruptcy. Wells Fargo did nothing. I'm using my Wells Fargo account as my primary account these days...........

[discouraged]

I had 3 accounts when I filed, 1) because the credit union wouldn't close it because I owed them money, 2) Just for internet payments for the computer, 3) the one I opened when I moved all my money from the credit union prior to filing the bk. The trustee didn't even blink.

I believe they realize people will protect the little bit they have when they fnally are forced to file bk.

[LadyInTheRed]

MY account? A significant balance? HA!

You are not the drone they're looking for.

[lotsahats]

The reason that question is on the statement of financial affairs is to make sure you aren't hiding any assets. If you close an account with a significant balance, the trustee will want to know what you did with the money to make sure you didn't hide it under the mattress without reporting it as an asset.

I closed a checking account a month before filing for reasons that had nothing to do with creditors or my BK. The trustee never asked about it.

MY account? A significant balance? HA!

I understand now, though. Thanks for your input (and you, also, Freddy).

[LadyInTheRed]

The reason that question is on the statement of financial affairs is to make sure you aren't hiding any assets. If you close an account with a significant balance, the trustee will want to know what you did with the money to make sure you didn't hide it under the mattress without reporting it as an asset.

I closed a checking account a month before filing for reasons that had nothing to do with creditors or my BK. The trustee never asked about it.

[Freddy03]

Thank you, Lady.

So, if we take the steps you suggest, do you think the trustee would understand why we did it? Because I was looking over the Statement of Affairs paperwork, and one of the questions specifically asks about accounts that have been closed. You don't think that would appear suspicious?

I was facing possible bank levies and already had a garnishment I opened a few new checking accounts so I didn't have all my money at one location. The trustee never questioned it. And if it was questioned you have a valid reason.

[lotsahats]

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.

Thank you, Lady.

So, if we take the steps you suggest, do you think the trustee would understand why we did it? Because I was looking over the Statement of Affairs paperwork, and one of the questions specifically asks about accounts that have been closed. You don't think that would appear suspicious?