Current checking with Chase, do I need to close account and open with new bank?

[christeyanne]

We currently have our checking and savings (although there's no savings in there) with Chase. We also have 3 credit cards with Chase, does anybody know if Chase will seize your checking account? I read somewhere that BofA does that, wasn't sure about Chase. I'm already overwhelmed by the beginnings of 13 and actually stopping my credit payments. I've always kept up on payments but now we are out of money and can't do this anymore. The thought of opening a new checking account with a bank we aren't defaulting on and setting up our direct deposits and automatic payments seems even more overwhelming.

[despritfreya]

The lender/bank could exercise its right to setoff. Will it is anyone's guess. Most likely "no" but why risk it.

My general rule regardless of financial condition (and of course, to the extent possible - so many mergers, transfers and assignments):

"One should never bank where one owes money."

Des.

[justbroke]

Exactly Des! Never have time or demand deposit accounts where you have credit products!

[Pizza]

My chase checking account and its pitiful $12.00 balance survived years of default on chase credit card accounts. That being said, I would rather not bank where I owe during a BK.

[daveinIL]

My chase checking account and its pitiful $12.00 balance survived years of default on chase credit card accounts. That being said, I would rather not bank where I owe during a BK.

I'm sure $12 doesn't even come close to offsetting the cost of the paperwork. If you'd had $1200 in there though.....

[Pizza]

My point was that they did not close my account, and there was no "freeze" placed on the account for future deposits, which I discovered when I closed it out. This was in case OP was feeling out Chase's reaction to credit obligations as it pertained to her checking account. There have been instances in which banks have charged leaps and bounds beyond the balance of checking accounts - creating a negative balance and putting the account holder into ChexSys. I would bet that a human being never looks at the account to care how much is in it; that it is all automated and triggered by a default.

christeyanne should find a small-time bank with which she has no obligations to reduce the risk of any action against her checking account.

[DeepBreaths]

Our credit union froze our acct when we filed. And it was just after DH got paid. We had to beg them to lift the freeze, and they did, for two weeks. Just enough time for us to open a new account with a "small-time" local bank. I'd suggest you open a new acct from my experience.

[pamkev]

We bank with one of those small time banks and have our mortgage with them. We are doing a stay and pay with them we have always been current and never late.

On the advice on this board we did open and have our paychecks deposited into another account with a different bank just in case the above bank closed our account.

They never blinked a eye never heard anything from them even about our loan. We do have a small savings accounts with them and everything seems fine and it's been almost a year since we filed.

Pam

[christeyanne]

Thank you all for the responses. We'll definitely find a new bank this week.

[LadyInTheRed]

According to the Comptroller of Currency, a national bank like Chase, Wells Fargo, Bank of America and others cannot use a deposit account to offset consumer credit card debt: http://www.helpwithmybank.gov/get-an...offset-01.html

I do agree that it is better safe than sorry. It's easier to avoid an offset than to get the money back later if the bank is wrong. But, there are situations when it makes sense to keep an existing deposit account open. I have a 5 year CD that earns 5% interest. By the time I filed BK, that rate was more than twice what you could get anywhere. Even though I had credit card debt with the same bank, I kept the CD rather than lose that rate. I did ask my attorney about the offset for credit card debt and he confirmed without hesitation what is at the above link. I'm over 3 years into my BK and I still have a $10k CD earning 5% while current rates are below 1%. Too bad it matures in about a year.