One of the most common reasons why bankruptcy is filed includes obtaining protection for your assets from creditors, like the money in your bank account. A question that is frequently asked by my clients is whether they can keep their bank account after filing their Utah Chapter 7 Bankruptcy. As a general rule, your account will remain open after the filing of your Chapter 7 Bankruptcy, but there are a few things to consider when making the decision to open a new bank account.
- Before the filing of your Chapter 7 Bankruptcy, you will want to make sure that you are on good terms with your bank. If there is an outstanding loan, line of credit, credit card, signature loan, or any other kind of loan in which you intend to discharge in your Utah Chapter 7 Bankruptcy, you may want to switch banks.
- It is sometimes appropriate to delay the filing of your Chapter 7 Bankruptcy for strategic reasons. When you stop making the monthly payments to the bank on your obligations, the bank may have the ability to sweep your bank account to satisfy any outstanding payments.
- I also frequently hear from my clients that they have been with their local bank or credit union for 20 years – that they have established a trust with their bank. While there may be some friendly and customer service oriented banks or credit unions out there, if you discharge a debt with that institution they will not hesitate to shut down your account or seize the remaining assets in your account.
It is easier to open a new bank account prior to the filing of your Chapter 7 Bankruptcy. If there is any hint that your account may be affected by the filing of your Chapter 7 Bankruptcy, you should probably open up a new bank account.
Please call me today at (801) 432-8682 to discuss your specific situation and how Bankruptcy may be right for you.
