I'm Having Problems Opening a Checking Account After Bankruptcy
Going through the bankruptcy process can give you a fresh start and eliminate all your debts. However, there are some challenges you might face after filing bankruptcy. If you included a checking account in your bankruptcy, it can be difficult to open a new account. One strategy is to open a new account at a new bank, with whom you have no previous history, before filing bankruptcy. If you have already filed and now find it difficult to open a new checking account, there are a few options you can try.
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ChexSystems
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In general, just filing bankruptcy will not cause you to have trouble opening a new checking account or keep you from maintaining a current account. If you did include an overdrawn back account in your bankruptcy, it is likely that bank reported you to ChexSystems. ChexSystems is a national database used by many banks to determine if you have a history of unpaid overdrafts or other debts associated with your banking history. It takes five years to be removed from the ChexSystems database once you are entered, even if you resolve the debt.
Credit Unions
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Credit unions tend to be more forgiving of bankruptcy on previous accounts. Call local credit unions to see if any of them will allow you to open a checking account with a recent bankruptcy and/or ChexSystems listing. The credit union might require proof that the debt listed on ChexSystems was resolved in the bankruptcy proceeding. Some banks or credit unions might also require you first open a savings account and keep it in good standing for a set amount of time before they open a checking account for you.
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Second-Chance Checking
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Some banks offer second-chance checking accounts. These programs might have differing requirements. For example, a program might require you to pay off any outstanding debts listed with ChexSystems, even if the debt was technically dismissed in your bankruptcy. Or the bank might require a deposit as security for a set amount of time. These accounts might not include check-writing privileges, but usually have debit cards and online banking options. The Second Chance Checking Banks website offers a list of banks that either don't use ChexSystems or that offer second-chance checking programs.
Prepaid Debit Cards
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Another option to re-establish a banking relationship is to open a prepaid debit or credit card account. It might also be called a payroll card account. Such an account allows you to receive direct deposits, or to add money manually to your account, such as through a local merchant. These accounts do not include paper checks, but have a debit card with a credit card logo -- usually MasterCard or Visa -- and a PIN. Most also have an online bill pay system, where you can schedule payments, and the bank sends a check directly to the recipient. These accounts usually have varying fees. For example, the WalMart MoneyCard, sponsored by G.E. Money Bank, is free with a minimum monthly direct deposit of $1,000, while iBankUP charges $4.95 per month, but reduces that to 99 cents if you load at least $500 to the card monthly.
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