Freeze Checking Account?

[mack14]

What is the name of your state? IN

Is it possible for a bank to freeze a checking account? I read something in a post below. I have a credit card with First USA visa that has since changed it's name/ownership to Bank One. I have my checking account and second mortage with Bank one, as it is a local branch. I am keeping my house and second mortage as I am current on both. I am now waiting on some final changes on my petition before I file chapter 7. I have not paid the visa card anything for 4 months now and just today got a call from them and I imformed them about the bankruptcy, refered them to the lawfirm handling it case# etc. (I had talked to all the other cards and imformed them long ago, but with the same name as my second mortage and checking I assumed the calls were for them and I knew I was current so I thought it was just a call trying to get me to up-grade my checking acct.) Can they freeze the account and all my checks bounce and I get stuck with several overdrafts? Can they flat out take the money out? I thought about this before I retained the lawyer, but was told then in the "rules" you can't open/close any accounts right before filing, and this is the only checking acct I have to write checks on.

 

[vgmhilliard]

bank accts

.....
Is it possible for a bank to freeze a checking account? .....you can't open/close any accounts right before filing, and this is the only checking acct I have to write checks on.

if your lender gets a judgement against u, they will clean out all the bank accounts u hold WITH THEM.

There is nothing in the law stopping u from opening a new account before or even after filing for BK. Funnily enough, by CA law e.g. the only 2 things u can't do AFTER filing for BK is 1) apply for new loans without disclosing u filed for BK and 2) changing your legal name.

The only problem u may face with the new bank account is that IF your lender gets a court judgement against u and SOMEHOW discovers your new account, they MAY try to lay their hand on it as well. However, this is a complicated thing for them to do PROVIDED your new bank is not a subsidiary or a banking partner of your lender.

 

[djohnson]

Your current account can be frozen and money taken out, which could cause checks to bounce. They do not have to have a judgment to do this since it is the same bank. Once you have filed they can't file for judgment as the debt is gone so your new account would be ok. It just needs to be somewhere you don't owe any money.

 

[mack14]

Freezing checking account

How long would it take for them, or I guess my question is, when can thery freeze the account and take the money out? Like I said I just told them today. I can open a new account with another bank, but I just thought the trustee would think it was kinda funny to do so. I thought my lawyer said not to open any new accounts. I have been trying not to keep any extra money than needed in the account other than to cover the checks written. I also keep reciepts for everything thats paid in cash, which is just gas, food and some utilities.

 

[djohnson]

They can take it once the loan (or credit card) becomes past due. It doesn't have to be in bankruptcy first. I think what your attorney meant when they said not to open any accounts, was to not open any (charge or loan) accounts. You can't create more debt.

 

[Ladynred]

For God's sake, get your money OUT of Bank One !!! They DO have a right of set-off to take money out of your checking to apply to past-due debts. However, they can do NOTHING to take ANY money from you AFTER the bankruptcy is filed, as that would be a violation of the automatic stay. Your lawyer should have told you before you got this far that you should move your checking account.