You may assume that you will be hindered from making any drastic financial moves, and even barred from accessing many of your financial assets, while your consumer bankruptcy proceedings play out. However, you may be unsure as to whether this rule extends to handling your cash on hand and making decisions about your existing and potentially incoming bank accounts. Well, please follow along to find out whether you can open a bank account during your bankruptcy proceedings and how a proficient Rockland County bankruptcy attorney at the Law Offices of Allen A. Kolber, Esq. can help protect these saved funds during this vulnerable time.
Can I open a bank account after filing for bankruptcy?
Contrary to what you may guess, no explicit law within the United States Bankruptcy Code prevents you from opening a bank account after you submit your bankruptcy petition. However, this is not to say that attempting to do so won’t pose any challenges. A financial institution may hesitate to accept your application if your active bank accounts are not in good standing. That is, you may have a history of negative balances or overdrawing funds, which likely lent a hand in your having to file for bankruptcy in the first place. Nonetheless, as a general rule of thumb, it may be easier to open a savings account rather than a checking account during this financially volatile experience.
How should I prepare my bank accounts before bankruptcy?
During this financial crisis, opening a new bank account may be at the bottom of your list of worries. However, we may recommend that you consider this more closely before you bring forward your bankruptcy petition. This may be especially urged if your active bank accounts are held at a financial institution where you have also taken out loans. This is because, upon learning of your bankruptcy, the institution may exercise its set-off right. Here, it may withdraw funds directly from your account and apply them to your outstanding loan balance. As you can assume, this may make your financial stress much worse.
And so, it may be in your best interest to apply to open a new bank account with a different financial institution before you submit your bankruptcy paperwork. If approved, you may transfer your remaining funds to this new account. Rest assured, this action is well within the law. Importantly, though, you must disclose both your old and new accounts in your filed paperwork, so that the New York State Bankruptcy Court does not suspect you are attempting to hide assets.
Before this gets too much, please seek the guidance and counsel of a talented Rockland County bankruptcy attorney from the Law Offices of Allen A. Kolber, Esq. We will work to the best of our ability to minimize or eliminate this mess from your immediate worry.
