bankruptcy chapter 7 and checking account?

Question

does anyone know what can happen to your checking account during a chapter 7 bankruptcy?i have a joint account with my husband,but im filing by myself.we have a overdraft line of credit at 1000dollars that has to be included.my lawyer says to call the bank and explain that im filing by myself not with my husband and we are gonna keep the account and keep paying what we owe on the overdraft.im concerned because our checks get directly deposited and im afraid they will take that money and close our account.then we wont be able to pay all our other bills.so what do you guys think?

Answer 1

Hello! Here's what I think. You have decided to file bankruptcy and your husband has not. That's okay. Lots of people do this- It sounds like you and your husband have a joint checking account that you both want to keep, and you both owe money on it. I think your attorney is right on the money. Calling the bank and talking to them may save you a lot of headaches in the end. Lets talk a little bit about this, and why...

Now, by law, you have to include this account in your bankruptcy petition. You have to show the Court that you have this account, and you owe money. This account must be put on your bankruptcy regardless if your husband is not filing. But, this is not necessarily a bad thing. Why? Because, now that the account is listed on the bankruptcy petition- you are afforded certain special protections under the Bankruptcy Code. The creditor (namely the bank) cannot garnish the account, harass you about the overdraft, or sue you for what is owed. While some banks are more rude than others, I don't think it is likely that they will take your money and close the account. But if you owe on an overdraft, generally the bank will pay the overdraft first, and allow whatever is not paid to remain in the account. That's how overdrafts work.

With that being said, I do not forsee the bank closing the account at that point. For the most part, if the bank is getting paid, and you have had a certain relationship with the bank- they will likely want to keep your business.

But, on the "flip side" maybe the question you should be asking is, whether or not you want to keep this account? You say you want to keep it because you have checks going there. But you can change where you checks are being sent. In fact, usually within thirty (30) days most people can have their direct deposits put into a new account. Why I say this is that I have found in the past some banks stop sending their customers statements during the bankruptcy (which is completely irritating to some people, but the Bank can do this- because they claim that by sending you a statement when you owe money- it is similar to trying to collect on a bill and they don't want to be caught trying to collect money during your bankruptcy! That's a no-no), and sometimes they and their staff can be less than friendly because generally everyone at the bank knows you are in a bankruptcy. People who have never been faced with a bankruptcy sometimes are ignorant and cruel to people who have had to file!
At least by talking to the bank you can find out what their general policy is on this (i'm sure they have delt with customers in your similar situation) and as you are willing to pay the debt, they may react friendly and work with you! By not communicating with them you are more likely to set yourself up for failure and surprise- whereas if you check now and find they are going to do what you fear- you can get in contact with your attorney as there may be other options available to you as a last resort. Before those checks get deposited!

It is always best to mull things over with your attorney who can provide you with the best options available to you and your current situation!

Hope that helps!

Answer 2

I was on the same situation and this site helped me CREDIT-COMPARE.NET-

RE Bankruptcy chapter 7 and checking account?

does anyone know what can happen to your checking account during a chapter 7 bankruptcy?i have a joint account with my husband,but im filing by myself.we have a overdraft line of credit at 1000dollars that has to be included.my lawyer says to call the bank and explain that im filing by myself not with my husband and we are gonna keep the account and keep paying what we owe on the overdraft.im concerned because our checks get directly deposited and im afraid they will take that money and close our account.then we wont be able to pay all our other bills.so what do you guys think?

Answer 3

Information on Chapter 7 Bankrupt

Chapter 7 bankruptcy is the commonest denotation of bankruptcy. It stands for waiving or canceling of debts that you have incurred. As an individual, you can select between Chapter 13 or Chapter 7 bankruptcy. Selecting between the two is not easy. The bankruptcy court will study your circumstances before deciding which type of bankruptcy is applicable to you..

Answer 4

No matter what you do (personally) a Chapter 7 will affect BOTH of you (and both credit ratings) -- and this joint account is definitely a problem -- because it is joint, and you are one of the owners -- sorry -- it is NOT going to be excluded from the bankruptcy -- and those other creditors can go after the funds in this account to look towards paying the bills under YOUR Chapter 7.

Answer 5

I agree with another poster have your direct deposit stopped until the bankruptcy has been filed to protect your income. Even after debts are discharged you can still voluntarily pay them.

Answer 6

well you need to 1st get your direct deposit stopped . then you need to go down in person and talk to the bank manager and let him know what is going on . and let him know that you will be paying this over draft thing your self or with your ex husband or how ever it is .