Closing checking account

[RickInMich]

Hi,

I thought I read somewhere here that closing a checking account looks bad to a trustee. Is that true? I have cancelled all automatic withdrawals for payments on ccs and mortgages and asked to be sent paper bills instead, but I'm worried that they will either make the mistake of withdrawing it or, if we stop paying on them, they will purposely make the automatic transfer.

So my question is, is it a bad idea to close the checking account and begin using one I have at an alternate credit union? And if it is a bad idea, I wonder if anyone knows why.

Thanks so much for any information.

Rick

[CindyLou]

It only looks bad if you can't account for the money that you took out of it! For example if you have an account with $5000 and you take the money out and close the account and you can't say what happened to the money. But it you take the money out and open another account with it or you take the money out and keep receipts on what you spent the money on you should be fine. They just want to know exactly where the money went. the trustee is only interested in debtors trying to hide money from the BK court. You are allowed to open and close accounts in the regular course of personal business.

[RickInMich]

Cindy,

Thanks for the explanation!! I have another reason I'm closing the account, too. I have had this checking account for 25 years. I have never bounced a check in my life. I have $1,000 overdraft protection on that, which I tend to go into at times, and then pay off with next pay check.

Well, I made a deposit in the night deposit box Sunday, and Monday a Capital One withdrawal came out BEFORE they registered my deposit. And because I was near the $1,000 overdraft, I effectively "bounced" that automatic withdrawal. They charged my a $25 fee for insufficient funds. So I called. Mentioned that I had made a deposit on Sunday. She's like, oh, well, those automatic withdrawals come out like 7 a.m., and we don't open until 9 a.m., but I'll check with accounting to see if they'll back that out. She puts me on hold and hten comes back and says, oh, sorry, they decline to back that out. Um, okay. Then I decline to keep my account with you, the one I've had for 25 years and never bounced a check in my life. It just annoyed me anyway!

The bottom line is, I will be closing an account with a negative balance, so I won't have too much to worry about as far as where funds went.

Rick

[lrprn]

The bottom line is, I will be closing an account with a negative balance...

This is likely to get you reported to CHEX systems, so go get your new checking account opened as quickly as possible! And get a debit card to go with it too.

[RickInMich]

lrprn,

Shoot, I never thought of that. I actually already have another checking account anyway at my employer credit union. But I don't have a debit card with them. I better get that.

Do you think it would be reported to CHEX even though my credit union transferred the amount from my savings (which luckily had enough in it) to cover the withdrawal? It wasn't a "bounce" in the normal sense.

Rick

[lrprn]

Do you think it would be reported to CHEX even though my credit union transferred the amount from my savings (which luckily had enough in it) to cover the withdrawal? It wasn't a "bounce" in the normal sense.

There's a negative amount showing in an account you closed and you're going to trust your credit union to "do the right thing" ? Sheesh! (rolls eyes) If I were you, I'd go get that debit card at your new bank right now!

However, if there's really not a negative balance showing on the closed account as you said originally, then there's nothing to report to CHEX and you're ok.

[RickInMich]

lrprn,

Done. Got the debit card approval over the lunch hour from my employee credit union, and it's on its way!

Just to be clear for others who may find themselves in my situation. I think I misstated something in my post. I won't be closing with a negative balance on my checking account.

My checking account will not show less than zero because my overdraft loan kicked in, which, combined with about $45.00 they pulled from savings, covered that witndrawal. So my actual checking account will not -- er, should not show even being bounced. My online statement shows "fee." I'll have to wait until October to see how they classify that "fee." But in any event, I won't close that account with less than zero in it. I guess I should have said I will close it, but keep the overdraft loan account open until I pay it off later this month.

Rick

[southernbelle]

Here’s another related question. I also have a checking account at Capital One. I closed my business account with them because my ex ran it into the negative, and I didn’t want the automatic drafts to make the account more negative than it already was, especially since they love charging those outrageous fees. I finally paid $3,800 to close the account and they still let several checks go through a couple of days after that. I went back and paid the addl $1,800 to close it again. Since all of the money I paid them was borrowed, I only had so much. Next thing I know, they send me a notice for another $800. Apparently, my “closed” account never really closed. Finally I spoke with the branch manager and she assured me it was closed. I then get a notice from the bank showing a lien against the account for $6,500 (for back taxes) plus $50 processing fee. WTH???

My attitude towards them right now is let is sit there since I’m making arrangements to pay the back taxes and I don’t use that account anyway. I was assured they wouldn’t charge me any fees because it’s a lien. Yeah Right…like I believe anything they say at this point. This is one of many things to push me in the direction of filing BK in the first place.

My question is, I have a personal account at Capital One where my paycheck currently is automatically deposited. Would you guys close that account and open a new one at another bank just in case they decide to wipe out the only money I have from paycheck to paycheck?