If you are planning on filing for bankruptcy, you should consider changing banks if you owe any money to that bank. Banks and credit unions may claim the right to take the money in your account and apply it toward the money you owe them. To prevent this (or a bank account freeze) from occurring, you should take steps to ensure you have no money deposited, at the time your bankruptcy petition is filed, with any institution that is your creditor. And, if at all possible, you should make sure that checks you have written on such “creditor” bank accounts have cleared prior to the petition date.

To be clear, if you owe money on a credit card, personal loan, or car loan to a bank holding your money, it's a good idea to close the account (checking, savings, money market, etc.) and open a new account at a bank or credit union that you haven't borrowed from. If you don't want to close the account, then go to a different bank (which is not a creditor of yours), open a new account to use, and don't leave any more money in the original account than you can afford to lose. When these planning steps cannot be taken, and the “creditor” bank freezes an account or takes money from it, you should contact your attorney immediately.

​Lastly, the bankruptcy forms require that you disclose any accounts that you closed in the year before filing.  Keep records of the account number, date, and ending balance on any accounts you close.

For help, contact the DiMarco Warshaw law firm.  For a free phone consultation Call  (888) XXX-XXXX.   Or, you can email us at: [email protected]