Can I Keep My Bank Accounts Open During Chapter 7 Bankruptcy?

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You may assume that, when filing for Chapter 7 bankruptcy, the first thing the trustee is going to go after is your bank account. But there is a way to protect your accounts and their funds. Read on to discover the possibility of keeping your bank accounts open during a Chapter 7 bankruptcy and how a seasoned Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help you protect this asset.

Can I keep my bank accounts open if I file for Chapter 7 bankruptcy?

Importantly, keeping your bank account open and keeping the funds within your bank account are two separate matters. First of all, most banks allow Chapter 7 bankruptcy petitioners to keep their accounts open as they undergo their proceedings. Though it is in your best interest to not assume this is your case, but instead, to personally confirm this with your institution.

Secondly, you must list your bank accounts in your bankruptcy petition and schedules. This does not necessarily mean that your bank accounts and their funds are going to be taken away. However, if the trustee discovers that you neglected to disclose certain accounts, then you may lose these funds, even if you would have otherwise been allowed to keep them. What’s more, you may ultimately be up against a bankruptcy fraud charge.

What bank account funds are exempt in a Chapter 7 bankruptcy?

Thanks to bankruptcy exemption laws, you may be able to maintain certain bank account funds during your Chapter 7 bankruptcy filing. This is because the trustee will be barred from using this money to pay off your creditors.

More specifically, in New York State, you may be allowed to protect up to $1,500 of funds in your bank account. Anything above this exemption amount on your filing date may be taken by the trustee, even if you still have outstanding checks or charges that have not cleared. This is why, to keep your balance low, it is best to pay off all your necessary bills before filing for bankruptcy.

With that being said, other exemptions that may be at your disposal in a Chapter 7 bankruptcy are as follows:

  • Your cash on hand.
  • Your personal property.
  • Your recurring wages.
  • Your social security or federal benefits.
  • Your pension or retirement funds.

It is worth mentioning that the aforementioned exemptions may only be up to a certain dollar amount. What’s more, they are not written off automatically. Rather, you are required to identify these funds and claim them as exempt in your bankruptcy schedule.

All in all, there is no time like the present to get your financial stability back on track. So reach out to a competent Rockland County bankruptcy attorney from The Law Offices of Allen A. Kolber, Esq. today.