When filing Bankruptcy, one may be including a debt owed to their Bank. It is commonplace to have a line of credit with the same bank as one holds their money. When you file for bankruptcy, what happens to these accounts?
After filing for bankruptcy, it is not uncommon for your online banking to be shut off. This is not indicative of any intent to close your bank account entirely, but rather is an effect of the bank’s effort to comply with the automatic stay which prohibits any and all collection from you during your bankruptcy. An online statement that reads “Balance owed” can be interpreted as one of these efforts at the collection of debt so rather than risk running into problems with the bankruptcy court the bank will simply shut off online access.
Banking
However, if you receive a letter from your bank that states that they intend to shut down your account, there is nothing that can be done and you will need to make arrangements to bank elsewhere. On the bright side, most banks will give you at least a few weeks to act on their notice so you can transition into a new bank and continue making and receiving payments.
It is much more likely that if you owe money to a bank you also have a checking account with it will shut down your account after filing. However, if you do not have a line of credit with them, most banks will allow you to continue banking with them even after filing bankruptcy.
How do I Prepare?
If you discuss this with a bankruptcy attorney, it is not uncommon for them to instruct you to open a new bank account somewhere that does not hold debt in your name. This way, transitioning important processes like automated payments and direct deposits before filing will minimize any interruptions afterward.
If you have questions about the bankruptcy process and how it might affect your partner or spouse, please feel free to reach out to your Yuba City bankruptcy attorney at (530) 797-4402.
The post What Happens to My Checking & Savings Accounts if I Go Bankrupt? appeared first on Law Office of Seth L. Hanson.
This post first appeared on Law Office Of Seth L. Hanson Bankruptcy, please read the originial post: here
