Does Filing Chapter 7 or Chapter 13 Affect Bank Accounts?

There have been many signs that the economy is improving nationally, thus creating positive financial outlooks for many Connecticut residents and others around the country. However, for others, there have been continuing monetary hardships with little hope for recovery. Some consumers elect to file for Chapter 7 or Chapter 13 bankruptcy to wipe the slate clean and get a new start with their finances. Regardless of the type someone files, there will be questions about the bankruptcy process and how it may affect one’s financial situation.

Many consumers want to know if their checking or savings accounts will be affected by filing bankruptcy. Financial experts say that individuals shouldn’t have a problem with maintaining those types of accounts, although each case is unique. In fact, if a person did not have a loan with a particular bank, there would be no reason for that financial institution to even know about the bankruptcy. On the other hand, if there were loans involved, the bank would be aware of the filing.

It is important to work with an attorney to protect one’s bank accounts in a bankruptcy. Some banks may use whatever available funds someone has in a checking or savings account and put them toward any outstanding debts. They are allowed to set off accounts in this manner even though a bankruptcy filing typically protects assets as soon as a petition is filed and creditors are notified.

Filing for Chapter 7 or Chapter 13 bankruptcy may be the best strategy for consumers hoping to make improvements to their financial situation. A Connecticut bankruptcy attorney can provide much-needed guidance through every step of the legal process. An experienced lawyer will work with clients to get their finances back on track.