Will My Bank Freeze My Checking Account When I File Bankruptcy? – Mike

“Dear Lewis,

Almost 29K in credit card debit. During the past 3 years I have been divorced, laid off for 10 months ( I am currently working now ) and found out that I have a son with a ex-girlfriend ( I am paying child support ). Their is no savings account and the 401k was cashed during my layoff. I make about 47K per year.

I have just filed for Chapter 7. My question is this…One of the credit cards that I had was Chase Bank, I also have my checking account with Chase Bank. Is it in my best interest to open a new checking account with a new bank seeing has how I just filed Chapter 7. My paycheck is direct deposited into my Chase checking account. Does Chase Bank have access to the money in my checking account? Do you foresee any “funny bussiness” with Chase, as far as my money goes, seeing has how I’m walking away from the debt that I owe them?

Mike”

Dear Mike,

I tell all clients not to bank at the same place where they owe any money to that bank. It just makes life easier.

Whether Chase has the right to setoff your bank account against money owed? I don’t know. But it is not worth the risk.

You should immediately put the money into a new bank, where you owe no money. And I would immediately have your check deposited into that new bank. Or at the very least, stop the automatic deposit.

Wells Fargo continues to freeze debtors’ bank accounts all over the country. Eventually, the money is usually returned to the debtor. But in the meantime, if your money is frozen by your bank, how do you pay your ongoing monthly bills.

It isn’t worth the even small risk. So move your money now.

Good luck!

My name is Lewis Roberts and I’m an attorney licensed in Florida and Georgia. My practice focus is consumer bankruptcy, real estate issues/closings, and mortgages. I also have Florida real estate broker and mortgage broker licenses. I am a proud member of the National Association of Consumer Bankruptcy Attorneys (NACBA), National Association of Consumer Attorneys (NACA), and a graduate of Max Gardner’s Bankruptcy Boot Camp. I enjoy helping people with decisions that impact their financial well-being.

Legal Disclaimer: This is for educational purposes only. It is not to be relied upon as legal advice. It also does not create an attorney-client relationship. No such relationship is formed with attorney without a written agreement.

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