Where Can I Open a Checking Account While Filing for Bankruptcy?

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If you have to file for bankruptcy, it can be devastating to your credit score. This makes it difficult for you to obtain any type of credit. Unfortunately, it may also mean that you will be prevented from participating in other financial related activities during the period when you are going through the bankruptcy process. After your debts are discharged, these constraints may last for a number of years.

Opening New Bank Accounts

Unfortunately, it may be difficult for you to open a new savings or checking account after you have filed for bankruptcy. Major banks will examine your application to determine your creditworthiness. By discharging all your debts via a bankruptcy, you will severely damage your creditworthiness. Most banks are not interested in trying to work with customers who have abused financial services in the past. They may be worried that you will try to take out more than you have in your account or write a bad check.

During The Bankruptcy Process

When you are involved in the bankruptcy process, many banks will be reluctant to let you open a checking account. Even though you haven’t yet filed for bankruptcy, if your case is active, you may have fewer options to choose from.

Avoiding Financial Disruption

When you are involved in discharging your debts, you may want to exclude one of your accounts where you can make deposits. In most states, you will be allowed to shield accounts that have a small amount of cash. You want to make sure that you have a savings cushion that is solid when you are going through the process of bankruptcy to handle any expenses that may arise.

Including All Accounts When You File For Bankruptcy

In some situations, you will not be able to avoid including all of your accounts when you file for bankruptcy. If this is the case, you will have trouble trying to open an account at any of the financial institutions where you had your debts discharged from. If you currently have any assets in those accounts when you file for bankruptcy, it could be frozen. In this case, it would probably be used as settlement for any outstanding debt you have with that institution.

Avoid Losing Control Of Your Cash

Having to file bankruptcy is a tough situation. If you have cash in any existing accounts where you can make a deposit, you may want to remove that cash and deposit it in a credit union or bank where you have never owed any money. If you transfer a small portion of funds to this account before you declare for bankruptcy, you will have control of some cash to take care of any emergencies. You just need to leave this small amount out of your bankruptcy filing.