If you have concerns about how bankruptcy could affect your bank accounts, it’s in your best interest to consult with our experienced Gillette Bankruptcy Lawyers, who can help you navigate the complexities of this process. Please continue reading as we explore whether or not you can open a new bank account after filing for bankruptcy.
Should I Close My Bank Accounts Before Filing for Bankruptcy?
Generally, you don’t have to close your bank accounts before filing for bankruptcy. If you have a creditor that is electronically deducting funds or if you are concerned about a bank freezing your accounts, you may want to consider switching banks and closing the old accounts. However, you must report all accounts in your bankruptcy documents. Keep records of your bank statements before and after filing for bankruptcy.
If you have a substantial balance in your bank account, closing the account may raise concerns with the bankruptcy trustee assigned to your case. You must be transparent with the trustee about all of your financial accounts, including those that you have closed. If you fail to disclose this information, it could be perceived as an attempt to hide or conceal assets, which could lead to severe consequences, including fines, jail time, and the denial or revocation of your debt discharge.
Will I Be Able to Open a New Bank Account During or After I File for Bankruptcy?
When filing for bankruptcy, you should consider opening a new account with a bank where you don’t owe money before filing. This is because banks can “set off” against your account if you owe them money on a debt and that debt has gone unpaid.
Contrary to popular belief, you can open a bank account while you are in bankruptcy. It’s important to understand that there is nothing in the Bankruptcy Code or Court Rules that prohibits opening a new bank account after filing for bankruptcy. However, you should be aware that when you seek to open a bank account, financial institutions and credit unions will run a credit report. Most financial institutions use a monitoring system known as “ChexSystems,” which is a database that notifies member banks and credit unions if a checking account has a negative or overdrawn balance. If you leave a bank overdrawn, this can affect your ability to open a checking account.
In some cases, financial institutions have policies against opening new accounts shortly after a discharge, or they may view your credit report and deny your applicaiton if they see a bankruptcy filing. If you cannot get a checking account, you should be able to open a savings account.
If you do manage to open a new account, you must ensure it remains in good standing to avoid future issues. Discuss your options with a qualified bankruptcy lawyer to understand how bankruptcy can affect your bank accounts and what steps you can take to shield them.
For more information, an initial consultation with a knowledgeable lawyer from 307 Bankruptcy is your next best step. Connect with our firm today to discuss your situation.
