Protecting Your Bank Account When You File Bankruptcy
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.
Contact a Bankruptcy Attorney to Protect Your Assets
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. If you would like to set up a free consultation with a bankruptcy attorney you can always contact us here. We are always there to help.