arghg, question about checking account

[sofarindebt]

I have two open checking accounts. One is just open, no money, and the other I have used for years. It feels like we are never going to get caught up so I was thinking about opening another checking account and moving our direct deposit to there. There will be overdrafts in our active account, probably around $1000, and I know we will get reported to chexsystems, but this is our only way to start over and get ahead? Will this be dischargeable in bkcy? Also, if we open a new account, and then get reported to chexsystems, will our new account get closed? Or do they only check the system at the initial set up of our account?

[CATCHMEIFYOUCAN]

Checking Account

I have two open checking accounts. One is just open, no money, and the other I have used for years. It feels like we are never going to get caught up so I was thinking about opening another checking account and moving our direct deposit to there. There will be overdrafts in our active account, probably around $1000, and I know we will get reported to chexsystems, but this is our only way to start over and get ahead? Will this be dischargeable in bkcy? YES Also, if we open a new account, and then get reported to chexsystems, will our new account get closed? Or do they only check the system at the initial set up of our account?

Based on your email you have a checking account with an overdraft of about $1000? You can include that in your bankruptcy. Give you an example. I had a checking account with Chevy Chase, with an overdraft of $500. I stopped using the checking account (but kept paying the minimum on the overdraft $20 a month). I included the "overdraft," on the list of my unsecured debts. I also had a couple other checking/savings accounts (with credit unions) and had to stop using them because I had credit cards/loans tied to the same credit union. I couldn't exactly close them down because of course I still owed on the loans/credit cards, so I simply stopped using them. I was able to obtain another checking account with Wachovia and re-direct my direct deposits into the new account. Get a new checking account before you file if you can!

Best Wishes, Catchmeifyoucan

[bingomamma19]

re think your plan

if you are thinking about just letting checks bounce, I would reconsider that. That is a criminal offense and you can be prosecuted by the merchants. You cant just write checks knowing that they will bounce. If you already have a deficit of $1000 in that checking account and are considering closing it, I guess thats different.

Just be very careful about bouncing checks, my sister bounced one check, on accident and was arrested for it. She had to pay the fines and it all costed her about 3x the original check, which was about $90.00. Just depends on the merchant on if they will prosecute you or not.

[sofarindebt]

what if it is check card purchases that are overdraft,

and not actual checks? Is that the same?

[lrprn]

and not actual checks? Is that the same?

Hang on...let's be sure we understand your original question correctly, SFID. When you say "overdrafts" on your checking account, are you saying you've written checks or used a debit card without having sufficient funds to cover them that have bounced and your bank has charged you $1K of insufficient funds fees? Or are you referring to overdraft protection on your checking account that currently has $1K owed to the bank?

If it's overdraft protection, then that is dischargeable in both Ch 7 and Ch 13just like any other non-secured loan. Just be sure before you file to remove all but $5-10 of your money from the associated checking account and open another account at another bank. Also remember to redirect any automatic deposits and automatic withdrawals you have set up with secured creditors into the new account as well.

However, if you have written checks or used your debit card knowing you didn't have sufficient funds to cover them and now have $1K owed to your bank, then that is likely not dischargeable because a good case can be made for the $1K being a result of criminal action/fraud.

[sofarindebt]

Thanks, LRPRN, you got it right on!

Okay so now I am a fraud, great. What can I do if I have about $1000 of overdrafts, on top of my $1500 line of credit (that I have been paying on every month). How long will it take them to come after me. I could probably pay it back as much as I can, but what kind of fees do they tack on after the $30 insufficient funds fee?

Thanks!

[CATCHMEIFYOUCAN]

Hmmm ..

Okay so now I am a fraud, great. What can I do if I have about $1000 of overdrafts, on top of my $1500 line of credit (that I have been paying on every month). How long will it take them to come after me. I could probably pay it back as much as I can, but what kind of fees do they tack on after the $30 insufficient funds fee?

So, I think I'm reading this right??? You have a checking account with an overdraft of $1000 and a $1500 line of credit? (I'm to assume its a "credit card?"). As I mentioned before I had an overdraft account of up to $500 (IT would cover any "unpaid," checks that came through - but I never bounced a check - granted I had funds in the overdraft) I could also use the overdraft for "cash advances," which I used more often than not (but I did keep up the minimums/and sometimes paid it off). I have 2 unsecured credit cards with the same bank as well (one for $5000 the other cc for $2500), ALL were included in the BK.
I wouldn't go accusing yourself of FRAUD too soon, innocent until proven guilty. You can just say I didn't know I was going overboard, afterall I don't understand why the bank would let a transaction go through if you didn't have enough funds, UNLESS of course you actually wrote checks ahead of time, than realizing "oh my gosh, I don't have enough funds!"

Maybe I'm a bit confused. All I can say is STOP, or CLOSE your accounts with that bank, and try to get a new checking account with another bank.

Best Wishes, Catchmeifyoucan

[Spartan]

I hate to tell you this, but the bank you owe money to, will report you. What or where they report you to, I have no idea. What I do know is, once you are 'in the system', then you are screwed. Your accounts at other banks will be closed. That is also the reason why I haven't have a bank account all these years. (That and the fact that I have a judgement against me. )

[CATCHMEIFYOUCAN]

Hmmm ...

I hate to tell you this, but the bank you owe money to, will report you. What or where they report you to, I have no idea. What I do know is, once you are 'in the system', then you are screwed. Your accounts at other banks will be closed.

Hmmm, Wachovia hasn't closed my accounts, I opened 2 with them when I first sought a DMP, BEFORE I filed?

That is also the reason why I haven't have a bank account all these years. (That and the fact that I have a judgement against me. )

Hmmm, maybe my situation is different as I've never bounced a check before or had not judgements against me???

Catchmeifyoucan

[lrprn]

Spartan likely has been reported to the CHEX system.

The Chex Systems, Inc network is made up of member financial institutions that regularly contribute information on mishandled checking and savings accounts to a central location. ChexSystems shares this information among member institutions to help them assess the risk of opening new accounts. ChexSystems only shares information with the member institutions and does not decide on new account openings, the banks and credit unions do.

There's a CHEX Victims Forums website at http://www.chexvictims.com/AspNetForums/ where members try to help each other overcome the problems of being listed with CHEX. You are required to join as a member (it's free), but then you have access to all their discussions. There's one forum dedicated to finding banks that will allow you to open accounts. I can't vouch for the reliability of their information, but several other financial forums on the net direct people there. Please let us know if you find it helpful.

[HHM]

If you can wait 90 days from the date of your last pull on the over draft, you probably can get this debt discharged. Since the accumulated amount is above $600, your overdraft would trigger the fraudulent presumption to discharge if you filed within 90 days. You should be ok if you file after 90 days, as the amount in question ($1,000), is likely too small for anyone to go after. For large institutions, to objection to discharge outside the 90 day presumption period, the balance generally needs to be in excess $2,500. The only places that object for less are local pay day loan places.

If you can wait the 90 days, you should be ok...but no guarantee.

[lrprn]

Okay so now I am a fraud, great. What can I do if I have about $1000 of overdrafts, on top of my $1500 line of credit (that I have been paying on every month). How long will it take them to come after me. I could probably pay it back as much as I can, but what kind of fees do they tack on after the $30 insufficient funds fee?

It looks like to fix the $1000 overdrafts for bounced checks, you will need to pay back the $1000 to the bank. I can find lots of bk case examples where filers have successfully discharged overdraft protection accounts, but I can't find one example where overdraft fees for bounced checks have been discharged through bankruptcy.

Please don't depend just on what you read here. Definitely discuss this with your lawyer to get a true legal evaluation of your options. Hang in there, SFID - please let us know what you find out.

[Spartan]

Spartan likely has been reported to the CHEX system.

The Chex Systems, Inc network is made up of member financial institutions that regularly contribute information on mishandled checking and savings accounts to a central location. ChexSystems shares this information among member institutions to help them assess the risk of opening new accounts. ChexSystems only shares information with the member institutions and does not decide on new account openings, the banks and credit unions do.

There's a CHEX Victims Forums website at http://www.chexvictims.com/AspNetForums/ where members try to help each other overcome the problems of being listed with CHEX. You are required to join as a member (it's free), but then you have access to all their discussions. There's one forum dedicated to finding banks that will allow you to open accounts. I can't vouch for the reliability of their information, but several other financial forums on the net direct people there. Please let us know if you find it helpful.

Thanks. I will look into it. I will keep the forum posted on what I learn.

There is only one check that I have bounced. That is a $5.00 check to the grocery store. The reason it bounced, is b/c my bank closed my account, and I didn't know about it when I wrote that check. Apparently, they did it b/c of the problem I had with my old bank, WellsFargo. The problem with WellsFargo was, they paid 3 ISF checks on my behalf (and charged me a hefty fee for their kindness), and I didn't have the money to make the deposit to repay them. I suppose that is considered bounced checks. They must have reported me then.

It is not listed in my Credit Report though. Only that $5.00 check is reported on the CR.

All of the above happened 4 years ago......

[Spartan]

Ok... here is something that maybe of use to members... Got it from a post at that forum..

"...US Bank and Wells Fargo offer the so-called "second chance" accounts throughout all of their locations across the country. Wells Fargo calls it "Opportunity Checking" Many people have reported on these threads that US Bank in particular has become most lenient with people on Chex and they will open regular accounts for people stuck in Chex as long as the customer does not owe US Bank money or if their previous accounts were reported for fraud. However, the business practices of each branch of these two banks widely differs, so a phone call to the branch manager to inquire about their policies would definitely be in order before you go in to visit them. For both US Bank and Wells Fargo; you must go into a branch in person to apply for the accounts; you cannot apply for a "second chance" account through their online web sites...." ------ by a user with the handle Rick4404


"...Just remember to keep one or more backup accounts if you still have negative information in your Chexsystems file.

Loss Prevention departments often act independently of local branches. They may get new management, establish new policies, or merge with another financial institution. Something may trigger an account lockout or closure. If that happens, you may not have immediate access to your funds.

I also recommend splitting a direct deposit if you are in Chexsystems. I have gotten many, many e-mails from upset individuals who could not access their money on payday because the bank's LP department had locked the account and cancelled their debit/ATM card...." ---- by a mod PBColeman



(P.S. I don't know about the policy regarding citing other posts. I figured I would just credit the original posters, and hope that is sufficient.)