When determining how to handle your bank account before bankruptcy, there are few things you need to consider.

Do you owe money at the same bank where you have a checking or savings account? Oftentimes, debtors considering bankruptcy bank and hold their mortgage at the same place.  Or, they have automatic payments coming out of their bank accounts for a credit card or car payment.  If that’s the case and …

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… check obligations.  Fortunately, bankruptcy discharges bounced check debts and other associated bank debts such as overdraft fees. The check reporting companies are obligated to accurately list the debtor’s account as “$0″ balance or “discharged in bankruptcy.” But some debtors may still have trouble opening a bank account after their bankruptcy discharge due to inaccurate reporting by one or more check reporting companies such as Chex Systems, Telecheck and SCAN.  Here’s what …

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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 …

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For years banking institutions have worked hard at convincing debtors that they should bank and borrow money at the same financial institution. But what if things go bad and you can’t pay your bills without jeopardizing the roof over your head? Filing for bankruptcy will stop judgments and other collections efforts of creditors; but what if you bank with one of those creditors? Well, if you file for Chapter 7 or Chapter 13 bankruptcy and have a bank account with one of your …

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Many debtors filing for Chapter 7 or Chapter 13 bankruptcy may have bank accounts open for their children and want to know if a creditor can seize the money in those accounts during a bankruptcy. Well, the answer is no, a child’s bank account cannot become the property of the bankruptcy estate. But that is only true if the child’s bank account was setup properly. If the account was not setup properly, the debtor will have to prove to the bankruptcy trustee …

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… while not cutting into the massive profits they make on overdraft fees.

The article said:

“Bank of America, Wachovia and JPMorgan Chase & Co. said they will limit the number of fees they charge and make it easier for customers to refuse overdraft protection… JPMorgan Chase will provide overdraft protection for debit cards only for customers who opt in. And rather than debiting withdrawals and purchases in order of size, from largest to smallest, they will be debited in the order …

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… debt is languishing and you haven’t made any payments they may attempt to garnish your wages or bank account.

What Happens In A Garnishment?

Once the debt collector secures a court judgment against you he can use it to seize your wages or bank account.

In the case of wage garnishment, most states won’t allow the seizure of more than 25% of your wages. Also, certain types of income, such as SSI cannot be garnished. Speak to an attorney regarding what income is exempt from …

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… take them to be debt free if only minimum payments are made may not effectively reach debtors who bank online or pay their credit card bill through automatic electronic payment.  Debtors who bank online and forgo credit card paper statements may need to navigate through a series of web pages and download a PDF file to access the new disclosure information.  But according to many debtor advocates, most credit card debtors don’t move beyond the initial web page which tells them their …

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… Trustee)), debtors accused of acting in bad faith after borrowing funds from their retirement account on the eve of their bankruptcy filing.

The details of the bankruptcy case:

In the Chapter 7 bankruptcy case, the debtors completed their bankruptcy paperwork stating that they had an average daily balance of $300 in their checking account and $25 in their savings account. However, after turning in the bankruptcy paperwork to their bankruptcy attorney ; but prior to signing the …

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… companies are failing to properly notify debtors of lawsuits and many debtors are finding their bank accounts seized having never received notice that they were being sued.

An article in the New York Times illustrates the fallout of the phenomenon:

“Part of the problem is the business model of these debt collection lawsuits,” Ms. Coffey said. Creditors often have bought the loans from another financial company, she said, and then hired companies that specialize in collections to …

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Most banking customers are unwittingly enrolled in their bank’s overdraft loan program which costs on average about $34 per overdraft occurrence. What this means is that if you mistakenly overdraft your checking account while purchasing coffee for $3 you will be charged $3 plus a $34 fee by the bank to cover the transaction. But there are cheaper alternatives.

Linked Savings Account – This program allows the bank to access your savings …

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… a Collection Due Process Hearing with 30 days from the date of Letter 1058, the IRS can levy your bank account, wages and other assets to collect back taxes.

If your bank account is levied by the IRS, your bank will have to pay to IRS whatever money is in your account on the date the levy is received by your bank. You have 21 days to get the levy released. If you do not take action, you bank will send the money in your account to the IRS which will be used to clear your tax dues. If your …