No laws or statutes prevent anyone from opening a new bank account during or directly following the bankruptcy process. That being said, most banks will conduct a credit check of some type. Depending upon the account guidelines of the financial institution, they may determine that the credit risk is too great and may decline the account. Your bankruptcy attorney should be able to guide you to financial institutions which work with customers in your situation.
Discharging Bank Debt
Many people are concerned about bank debt and bankruptcy. Primarily, they may be concerned about whether a bank can freeze their account during the bankruptcy process. In most cases, they cannot hold your account as a direct result of filing bankruptcy. However, if you owe money to that institution because of an account that has gone negative or through a loan which will be included in bankruptcy, it is a good idea to open a new account before you file with the court. This will prevent the bank from trying to offset the account balance against any outstanding debts.
A more pressing concern about opening a new account would be an entry on the Chex Systems. Governed by the Fair Credit Reporting Act, Chex Systems is a consumer-reporting agency. Most banks, including local and regional banks, are members of Chex Systems. In the event that your account is closed with a balance due, the financial institution charging off the debt in question would file a report. That blemish stays on your record for seven years, greatly limiting the number of banks which will work with you.
Savings and Second Chance Accounts
If you have been turned down for an account because of either your credit history or a history on Chex Systems, try inquiring about a savings account. Banks may be more lenient regarding a savings account. Some institutions also offer a second chance account for anyone who has been denied a traditional checking account. These accounts generally come with restrictions and may require at least a monthly direct deposit.
Rebuilding Your Banking Accounts
Once you have established a new banking account, it is important to establish a good relationship with that institution. This is your chance to start over. Make sure you take full advantage of it. Open a savings account and begin making regular deposits. Saving for a rainy day is essential to avoid any future credit and banking troubles. Also, make it a point to live within your means, even if that entails foregoing some comfort items at the moment. By establishing positive a long-term relationship with a new bank, you may be able to negotiate a favorable loan in the not-too-distant future.
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