WHAT? Bank can freeze funds in account?

[momofthree]

Didn't want to hi-jack another thread, but I just read a post from BKDefender that said that Chase and Wells Fargo will freeze your funds on the date you file bk. I bank with Chase and was not aware of this. How would they even know that I filed? Is it only if we owe them money (which we don't)?

I'm flipping out as my case is supposed to be filed this week and I have a tax refund being direct deposited this week (it's exempted), etc.

How long does the freeze last?

If you can't tell, I'm freaking out here!

[DeadManCrawling]

They can and do, but the reasons and circumstances are not always clear.

Members of this board have had accounts frozen and been told by the bank that it was a preemptive move to protect the BK estate for the trustee.

Some common themes in many account freeze situations: Wells or Chase, account balances over a certain dollar amount.

Many folks on the forum advocate not having large sums in the bank on filing day for this reason.

One member had to engage in a months long battle in court to have exempt funds freed. This can be a real hassle if you need that money to pay bills or buy food.

Other members have had the funds unfrozen within a few days. You should probably search the forums and learn more.

Generally, you want little money in the account on filing day, if possible.

[mysticspirit25]

I know for a fact that the way Wells finds out is their risk department (yes for checking accounts/deposit accounts) has a computerized system that checks PACER records daily or cross-references them to see if any accountholder has filed BK, if it gets a "hit" then it is manually reviewed to see it it is in fact the correct accountholder (i.e the last 4ssn are verified from the bk filing) and then the account is frozen, usually is frozen 2-3 days after BK case uploaded to court.

[momofthree]

So, does it only freeze what's in the account on that day? I'm just wondering, if the petition is filed tomorrow, for example--with only about $400 in the account, and the $4200 tax refund is deposited on Friday, will they automatically freeze that too, or do they only freeze what's in there the date of filing?

And, then, of course, we have our regular paycheck being direct deposited on Monday, and our mortgage payment is an automatic withdrawal. Oh man, I hope they don't freeze our account, we'd be screwed. We do most of our banking electronically!

[yomann]

So, whick banks are likely to freeze your accounts - the ones you are a debter to ?
What about an account with a different bank, is it safe ?

[Dst1]

So, whick banks are likely to freeze your accounts - the ones you are a debter to ?
What about an account with a different bank, is it safe ?

Any bank you are debtor too will likely freeze your accounts because most have what are known as "cross collateralize" clauses. I.e, the won't just freeze they will take the money to pay your debt to them.

The two banks that you don't have to be a debtor with are Wells Fargo and Chase. Well Fargo has been doing it for years. Chase seems to be the new kid on the block in that regard.

Technically, any bank could do it. Most don't care to unless they have something at stake or get hit with a court order.

[JackBondLove]

Wait a minute. I can understand that if I owe Chase $43K in unsecured debt, but have $3.50 in my bank account there, that they can freeze that. (These are roughly the correct figures in my case. )

But if I have an account with SomeOtherBank, would this bank also freeze my account?

I am planning on taking a partial distribution of my Roth IRA a few days after I officially file and having the money wired into a bank in which I have an account (but have no debt); I am only going to have a token amount in this account on the filing date. Can I still do this transfer with no problems? Or would I need to open up yet another account at another bank to use until the BK is complete?

[music12]

the thing to understand here is that each bank has their own policy about what to do when you file bk. they all know you filed whether they are a creditor or not because indeed they automatically search pacer every day to see the filings. then, if a bank is a creditor you will be in trouble in many cases if you have your money with them. if the bank is not a creditor, then it has been the experience of people who post on this forum that wells fargo, and more recently chase, have a policy of freezing accounts. no other bank so far does that.

so it is probably the case that if your bank is neither wells fargo nor chase, and is not a creditor, your money will be safe.

[JackBondLove]

the thing to understand here is that each bank has their own policy about what to do when you file bk. they all know you filed whether they are a creditor or not because indeed they automatically search pacer every day to see the filings. then, if a bank is a creditor you will be in trouble in many cases if you have your money with them. if the bank is not a creditor, then it has been the experience of people who post on this forum that wells fargo, and more recently chase, have a policy of freezing accounts. no other bank so far does that.

so it is probably the case that if your bank is neither wells fargo nor chase, and is not a creditor, your money will be safe.

Interesting. I am actually planning on moving my 401K into a Wells Fargo account (post BK filing, but pre closure.) I actually opened up the account and told the officer that there was a very big chance that I would be filing BK, and asked if that would be a problem (he said no), and I only have a token amount there anyway. I guess that I will have to call up a few days after filing and ask if my account there has been frozen, in which case I would have to set up a new account that would not be frozen.

[me90210]

Is that even legal?

I can understand a "Setoff", but just freezing your account for the heck of it even though they're in no way affected by your BK?

[fortknox]

So, we bank with Wells Fargo and have a car loan as well as a credit card through them that will be included in our BK. It sounds like I should open an account at another bank and have all my direct deposits go to that other bank before filing? After the BK is discharged, is it safe then to resume banking (checking) with Wells?

On another note, my husband is also employed by Wells Fargo. Anyone know if us filing BK and owing them money can have any impact on his employment? Can they fire him or anything like that??

[me90210]

So, we bank with Wells Fargo and have a car loan as well as a credit card through them that will be included in our BK. It sounds like I should open an account at another bank and have all my direct deposits go to that other bank before filing? After the BK is discharged, is it safe then to resume banking (checking) with Wells?

On another note, my husband is also employed by Wells Fargo. Anyone know if us filing BK and owing them money can have any impact on his employment? Can they fire him or anything like that??

That's illegal, just don't let them know beforehand. Not to say they can't fire him for anything else, but it would be fishy and open them to lawsuits.

[OhioFiler]

So, we bank with Wells Fargo and have a car loan as well as a credit card through them that will be included in our BK. It sounds like I should open an account at another bank and have all my direct deposits go to that other bank before filing? After the BK is discharged, is it safe then to resume banking (checking) with Wells?

On another note, my husband is also employed by Wells Fargo. Anyone know if us filing BK and owing them money can have any impact on his employment? Can they fire him or anything like that??

Ain't gonna happen. Your business relationship with WF is unique to your husband's employment. I'd bet no one at WF ever even knows it is an employee who bk'd them.

[goneunder]

Banks are dirty! We discovered we were short money and began looking into it only to find that B of A took $800 out of our account then charged us overdraft fees when our house payment bounced, nice huh? We have a car loan and a small business loan through them, the car we agreed to surrender but they took the money anyway.

[liz417]

I have accounts with both Chase (used to be WaMu) and Wells Fargo and nothing was "frozen" when I filed BK. It really depends on the amount in the account(s) (I've read a few posts and they had over $10k...I didn't have that much ), but I filed BK on my Chase credit card on $27k worth of debt and at no time did they take out any $$ in the account.