bank fees before chapter 7

[Pennybags]

My bank won't cancel my account until my balance is positive. Unfortunately, I have a creditor that won't stop their autodrafts. Would ignoring the issue count as taking on new debt before filing? I have asked them not to pay but they'd rather charge me overdraft fees than close the account.

I am undecided on filing pro se or with an attorney, but did not like the sketchy one I met with already. Meeting with a more expensive attorney next week, but I'm wondering if I shouldn't try taking care of this now before fees start racking up even more.

[bcohen]

Don't be a fool and throw good money after bad. Depositing money into the bank account in order to clear the negative balance does not guarantee that further fees will not accrue. The reason is because most banks will reopen a closed account for purposes of assessing NSF fees if anyone tries to auto-debit that account. Therefore, you could potentially pay hundreds of dollars in NSF/negative balance charges in order to "close" the bank account, but then find yourself right back to square one when the creditor tries to auto-debit again.

My advice is to ignore the overdrawn bank account, as you have already made the decision to file for Chapter 7 bankruptcy. If necessary, you should open a new account at a completely unrelated bank or credit union, where you do not have any debts. If, for some reason, your attempts to open a new account are denied due to this overdrawn account, rest assured that after discharge, you will be approved.

Once you have decided that bankruptcy is definitely in your future, you should stop paying all unsecured creditors, except for student loans. When you do file, you would simply include the bank in your mailing matrix and list of creditors, and the alleged debt will be discharged. Upon receiving the bankruptcy notification, your bank will permanently close the account and deny any further auto-debit attempts. The automatic stay will prevent the bank from reporting you to ChexSystems, and the discharge injunction will prevent them from ever pursuing you for the money.

As a side note, the ongoing NSF and "negative balance fees" which are accruing are not considered "taking on debt" before filing. The reason is because these charges are neither initiated by you, nor are they a promise to pay for goods/services which you are purchasing. Also, depending on the complexity of your case, i.e. whether or not you own real estate, your income and debt situation, etc, it may be very possible for you to file pro-se using the NOLO book like I did.

[leonel9]

As a credit union employee, I can also provide these suggestions which may work for your bank:

- Instead of closing the account, ask to transfer the account to one with a new account number. This is generally done when there's fraud on your account. I have personally transferred accounts with negative balances. That's the only way to close an overdrawn account.
- You could request a stop payment for the item(s), but there's probably a fee associated with this.
- You could dispute the charge with your bank. If resolved in your favor they should waive the NSF fees.
- You could ask the merchant to discontinue withdrawals from your checking account. I'd put this in writing, in case you want to use your communication as proof in the future (e.g. for a dispute)