QUESTION
if i file bankrupycy will i have to close my checking acc.
Asked on Jan 14th, 2013 on Bankruptcy - Georgia
2 ANSWERS
Attorney serving Rego Park, NY
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Violetta Khanan Attorney at Law
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Usually it is not necessary to close your bank account when filing a consumer bankruptcy case. HOWEVER, if you owe a debt to the bank that holds your account, it is very important to make sure there is not a significant amount of money in the account when you file. If the bank chooses to do so, it could freeze your account and apply to the bankruptcy court for permission to apply the funds in the account to your debt. This is known as a right of setoff. If my client owes money to the bank that holds his/her checking or savings accounts, I recommend that they open an account at another bank before the bankruptcy case is filed. This gives them access to a new account in the event the creditor bank chooses to close my clients' account.
Answered on Jan 17th, 2013 at 1:29 PM
Bankruptcy Attorney serving Burbank, CA
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Law Office of Mark J. Markus
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No, you are not required to close bank accounts when you file bankruptcy, except in a Chapter 11 case. Chapter 11 debtors in most states are required by the Office of the U.S. Trustee to close existing bank accounts and open new ones on the date the bankruptcy case is filed. This is to aid in the required monthly reporting requirements and to separate the pre-bankruptcy and post bankruptcy finances.
Mark Markus has been practicing exclusively bankruptcy law in California since 1991. He is a Certified Specialist in Bankruptcy Law by the State Bar of California Board of Legal Specialization, AV-Rated by martindale.com, and A+ rated by the Better Business Bureau.
Answered on Jan 15th, 2013 at 3:42 PM