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.

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