Will Anything Happen to My Bank Account When I File Bankruptcy?

November 29th, 2012 by Reed Allmand

One of the most common reasons why bankruptcy is filed includes obtaining protection for personal assets from creditors.  When you file bankruptcy assets such as bank accounts will likely be protected.  Some debtors worry if their account will close once the petition is filed.  Mostly likely your account will remain open and you won’t lose assets connected to the account.  Yet, there are a few things to consider when it comes to your bank accounts.

Before filing for bankruptcy you want to make sure you are on good terms with the bank you have an account with. If you owe outstanding debt such as overdraft fees or a line of credit in which you intend to have discharged, you may want to switch banks.  Review contract or bank account terms; automatic payments (also known as a set-off) could be made from your account if you have fallen behind on payments due.  While this depends on your bank or credit union it is possible they may withdraw payment without your consent even before or after your filing. A bank account may be closed if it has a balance that will be eliminated in bankruptcy.

Bankruptcy offers protection for bank accounts through exemptions which vary depending on the state you reside.  In many cases bank accounts can be protected if funds in the account are used to support living expenses.  If you need to open a new account it may be easier to do this before you file. Some banks may have you wait a few years after you file.

 

Reference: http://www.duncanlawonline.com/what-happens-to-bank-accounts-in-bankruptcy/

avatar

About Reed Allmand

Website

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."

View all posts by Reed Allmand

Subscribe

Subscribe to our e-mail newsletter to receive updates.

FAQ

Why do I need to submit a new wage order when I modify my plan

When we modify your bankruptcy plan we are changing your plan payments. This means that we have to get with your employer and change the terms and amount of your wage order. The only way we can do that is by filling out a new wage order form.  

Learn More
What happens if the stay terminates on my home?

If the bankruptcy stay terminates on your home that means that even though your in bankruptcy, your creditor can pursue all there legal remedies they can pursue if you were not in bankruptcy. This includes foreclosure, and having your house sold and evicting you from your house.

Learn More

Find Location

map
  • Dallas Bankruptcy

    5646 Milton Street, Ste. 120 Dallas, Texas 75206
  • Fort Worth Bankruptcy

    860 Airport Freeway, Suite 401, Hurst, Texas 76054
  • More Locations

Meet Our Clients