May 19th, 2009 by Reed Allmand 
When a debtor files bankruptcy he/she needs to consider the effect it may have on his/her bank accounts. Usually when a debtor files bankruptcy, his/her bank accounts are not negatively impacted unless of course there are overdraft fees, bounced checks etc. that need to be paid. But there are some cases where a bank account may be affected by bankruptcy.
Is your bank also your creditor? If a debtor files bankruptcy and has a bank account with one of his/her creditors, the bank may freeze the debtor’s bank account and request that the money be used to pay the outstanding debt. Also, after a debtor files bankruptcy, their bank may decide to close any open lines of credit. For example, if a debtor had a home equity line of credit, the bank may close that line credit after receiving the bankruptcy notice.
Because having a frozen bank account can cause a debtor more financial problems such as bounced checks it is probably wise to open a separate bank account with a bank that is not a creditor before you file bankruptcy. Speak with a bankruptcy attorney to find out what other ways you can protect your assets during bankruptcy.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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