Bank account question..

[hearr]

I read here in this forum somewhere that (on the date of Ch. 7 filing), the Trustee can take control of your bank account. We were not told this by our attorney. What we were told was, that because my wife had a credit card account (in her name) thru the same bank as our joint checking, that we needed to change banks because the creditor/bank (who is one in the same) could freeze the checking account to satisfy the debt.
So we closed the account & re-opened another at a different bank. My wife has filed a Ch. 7 (strictly in her name) about 2 weeks ago & we have not seen any activity on our new checking account where the Trustee took over the account. Is it possible for the Trustee to still freeze our checking account even though the filing has already been done? Or can any other creditor attach our joint checking account? FYI: I do have a checking account in only my name at the same bank. Would we be better off/safer to transfer most of our joint checking account money available over to this bank account?

[CATCHMEIFYOUCAN]

I never heard of such a thing of the Trustee freezing any bank accounts, ONLY the CREDITOR would do that! Like I had a checking account with an overdraft protection of $500 with Chevy Chase. I still owed on the overdraft and kept only a $1 in the checking account because the Bank would not close the account since I still owed money. They did however FREEZE my account once I filed BK ! By than though, I had already opened a new account with another bank, all the Trustee wanted was my Bank Statements(check to see if I have any big amounts of money for him to dispurse to the creditors) but that is all.

Best Wishes, CMICY

[sodone]

I have come through this issue on the forum as well, and have the same question. It has come across that the trustee looks at your account to see what kind of funds are in there to disperse to creditors, however, what is considered "significant" to disperse? and I have read on here people talking about the trustee seizing your accounts as well Catch.

Hopefully someone can clarify this, for right now I am paranoid about money "sitting" in my account for ongoing monthly expenses(i.e. food and gas), its to the point of us living paycheck to paycheck and the bills are paid the same day my DH gets paid so Nothing is sitting in the account. Right now I have the same impression that big brother is watching every move once you file...

[hearr]

I never heard of such a thing of the Trustee freezing any bank accounts, ONLY the CREDITOR would do that! Like I had a checking account with an overdraft protection of $500 with Chevy Chase. I still owed on the overdraft and kept only a $1 in the checking account because the Bank would not close the account since I still owed money. They did however FREEZE my account once I filed BK ! By than though, I had already opened a new account with another bank, all the Trustee wanted was my Bank Statements(check to see if I have any big amounts of money for him to dispurse to the creditors) but that is all.

Best Wishes, CMICY

Thanks for the response. Actually I read a post related to this right here in this forum. It stated that you should keep the balance in your checking account very low especially on the filing date & stated that the Trustee could freeze this account if there was a fairly high amount in there (at his discretion). I guess what I am wondering is that, since my wife's filing date has come & gone (about 2 weeks ago), do we still have to be careful of monies in our joint account? I have my employment payroll direct deposit going in there, etc.

[JollyGG]

The trustee does not freeze your account.

If you have significant money in your accounts that you cannot cover with your state exemption the trustee may Sieze your nonexempt funds and disperse them for the benifit of your creditors.

But what actually usually happens is you work out a payment plan to pay the trustee the amount that was nonexempt.

It is best to time your filing for the time of month when your account is naturally at it's lowest so you have the least amount you need to cover with your exemptions. Most states do not allow a very large "cash at hand" exemption or "wildcard" exemption.

[CPO]

Cash in your accounts is covered by your exemptions.

Ensure whatever cash on hand does not exceed your claimed exemptions the date you file and there won't be a problem.

Trustees don't take control of your accounts. They would demand from you any cash that exceeds your exemptions for distribution to your creditors.

CPO

[CATCHMEIFYOUCAN]

"But what actually usually happens is you work out a payment plan to pay the trustee the amount that was nonexempt."

That makes more sense ! CMIYC

[hearr]

The trustee does not freeze your account.

If you have significant money in your accounts that you cannot cover with your state exemption the trustee may Sieze your nonexempt funds and disperse them for the benifit of your creditors.

But what actually usually happens is you work out a payment plan to pay the trustee the amount that was nonexempt.

It is best to time your filing for the time of month when your account is naturally at it's lowest so you have the least amount you need to cover with your exemptions. Most states do not allow a very large "cash at hand" exemption or "wildcard" exemption.

Ok, since nothing happened on the filing date, what about now that the filing date has come & gone? Do we still have to be concerned with monies in the bank account?

[whatamess]

I think the only issues is if you were to have, say a CC account in BR plus your CFHECKING account with the same bank, like Chase for example. Then you would have to worry about them but I doubt the trustee.
Even so, you can always pay with money orders and keep the money out. You can take it out direct deposit day and get the money orders made out. Save evidence (stubs with bills) thats what you did.
Ive been using MO now for awhile. Im paranoid though.
WAM

[JollyGG]

Depending on your district and your trustee, you may need to show a bank statement from your filing date so the trustee can see what was actually in there on that date. As long as you have exempions to cover that amount no worries.

If you are asking if, now that filing is past, can you use your checking account as you nomally would. The answer is yes. Money can come in and out of your account as normal.

[BKOnce]

For criminal businesses, extortion, organized crime, money-laundering, drug trafficking, tax evasion, off-shore accounts, white-collar section or terrorists, ...then yes... FBI, IRS, CIA, DEA, all have authority codes allowing them to track/seize individual/business/commercial banks account .... but not friendly BK civil codes