A Chapter 13 bankruptcy provides debt relief for those who are having difficulty making monthly debt payments. A Chapter 13 bankruptcy can also stop foreclosure proceedings. When filing a Chapter 13 bankruptcy, you may worry about being able to open a new checking account. However, in most cases, a Chapter 13 bankruptcy will not affect your ability to open a new checking account.
Chapter 13 Bankruptcy Overview
A chapter 13 bankruptcy allows consumers to consolidate debt into one manageable payment. The debt payment is paid to the bankruptcy court usually through a payroll deduction. The bankruptcy court then disperses payments to creditors. A chapter 13 bankruptcy will negatively impact your ability to get credit or loans for several years.
A bankruptcy typically has no effect on your ability to open a new checking account. Banks do not require a credit check in order to open an account and they do not review public records such as though containing bankruptcy information when opening new accounts.
If you have a history of bad checks, you may have difficulty opening a checking account. Bad checks are reported to ChexSystems. Banks will usually review information in ChexSystems before approving your new account and may deny the account based on information found in the system. If you are denied a new account, you can request a copy of your ChexSystems report by visiting their website. However, after filing bankruptcy, you can contact ChexSystems and request that negative information relating to any debts that part of your bankruptcy be removed. Once the negative items are removed, you will again be able to open a new checking account.
Opening a New Account
If you owe money to your current bank for either bad checks or a loan, your lawyer may suggest that you open a new account. Opening a new account will protect your money in case your original bank freezes your account or automatically collects money from your checking account to pay debts owed to them.