One of the questions I ask my clients as they prepare to file bankruptcy is if they owe any money to the bank or credit union where their checking or savings account is.
If the answer is yes, I advise them to open another checking or savings account with another bank or credit union where they don’t owe any money. My experience, especially with Wells Fargo, is that the bank or credit union may freeze any funds that are in the account on the day the bankruptcy is filed. As you can imagine, this can create a hardship for someone who is trying to make ends meet.
Changing banks can require some planning and may delay the bankruptcy filing by a couple of weeks, especially if your paycheck is being direct deposited. Your employer will need some time to make sure the check is deposited in the new account.
This issue is just one example of the planning that has to be taken into consideration when filing bankruptcy. Oftentimes, people come into my office wanting to file right away. Usually, they are being garnished. But it’s important to take into consideration many factors. For example, if they file at the beginning of the year before they get their tax refund, they’ll lose that tax refund. Delaying their filing by a few weeks will allow them to use the refund to pay for essential living expenses and not having to surrender the refund to the bankruptcy trustee.
If you have questions about the bankruptcy process or are wondering if bankruptcy is a good option for you, we hope you’ll come in for a free consultation with an experienced Colorado bankruptcy lawyer. You can make an appointment by calling 303.331.3403 or by using our online scheduling system.
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