Bankruptcy and Overdraft

[Joe90]

Hi everyone. I just retained a lawyer and supplied all the paperwork for filing chapter 7. I am not worried about the credit cards, but am worried about bankrupting my overdraft account (currently at - $1800) I seems I got into a viscious cycle- using overdraft to pay bills I could not afford and then when my paycheck got deposited each Friday it paid off most of the overdraft and there was nothing left for food- so I used it for food too.

I am nervous because I don't know how bankruptcy works for overdrafted accounts. My attorney said his gut feeling is we will be OK but he said worst case the bankruptcy court may make me pay the bank back and discharge the credit cards. That will be hard to pay back- but obviously I do what the law says to do if it comes to that. The other thing is I just opened a new checking account and within a week will have a Visa Logo debit card for my checking account. Since I have stopped direct depositing to my old bank- I am sure within a week I will hear from them. My lawyer said to not answer the phone and dont reply to their mails. We will be filing chapter 7 within 4 weeks. Question: Will my New bank find out about me bankrupting my Old bank? If they do- can they take back my new Visa debit and/or close my new account? If that happens I am in serious trouble because I will have no way to cash my payroll checks or pay bills. My attorney does not know what will happen with this. He said Chexsystems is a pain but said it might be OK since I already opened a new checking at a new bank. The other thing worrying me is that I had to use the overdraft last week for the final time to pay 3 bills- 2 were debits and one was a check and they all were paid and cleared. My bank will be calling in about a week- Can they reverse the payments recently made? My attorney does not know if this can happen.
debits and that 1 check that cleared happened on Wednesday June 2nd.

Now my bank won't likely call me for at least a week- as time goes on will the debits and that One check be considered OK? They all cleared and were paid so I dont think my old bank can reverse the payments- can they?

That's the only concerns I have and I am worried because if the payments are reversed I dont have the money to pay those bills- at least not now.
My attorney said by the time the bank actually starts to figure this all out and start their own collection or action it will be weeks out and that I should be ok. Any ideas??? Am I going to be ok. I am a single dad age 52 with a daughter living at home. My mortgage and home equity loan are up to date and never late. I should not lose my home according to my lawyer

[lrprn]

Hi Joe and welcome to BK Forum! I moved your post from its old 2009 thread to your own new thread here. It's against our forum rules to post to old, long-inactive threads because some may contain outdated information. Also you'll get better and more answers with your own independent thread. Thanks!

[keepinitreal]

That's great that you've retained an attorney and will be filing in 4 weeks. Trust your attorney and do what he says. It's a once-in-a-lifetime event for you, but an everyday occurrence for your attorney. Trust him, do what he says, and you'll be fine.

I moved my checking account and auto-deposit to another bank and stopped paying an unsecured line of credit at my old bank over 2 months ago. Nothing has happened except phone calls and letters. I've ignored the phone calls as your attorney recommended you also do. You should be fine between now and when you file bankruptcy.

Good luck!

[Joe90]

Thanks for writing back. Needless to say- I've been a nervous wreck for the past weeks. I am a responsible person and hate doing this- but if I don't I won't have any quality of life and neither will my daughter. I feel very bad about this- but believe that with a fresh start and a new and better understanding of debt and the pitfalls of credit- I feel I will be better off. I truly appreciate the reply. Best of Luck to you and Yours!

[frogger]

There should be no problem at all discharging the overdraft fees. And.... since you already have a new bank account opened, you should be good all around.

Good luck!

[epiphany]

My attorney included my overdrafted checking account in my Bankruptcy and it was discharged with no problem. Mine was not as overdrawn as yours but I can't see why the amount would matter. If your lawyer says that you will be fine, you most likely will be.

Good luck,

ep

[Exployer1234]

My overdrawn account was also included in the BK. There has not been any issues so far. I already ahd a new account, so hopefully you will be fine as well.

[Joe90]

Thanks to All

Thanks to all of you who replied. I'm not sleeping well and have been an emotional wreck the past week. I feel bad about having to file- but if I don't I will be in a financial train wreck months from now. My daughter also lives with me so I need to take care of her as well. Have a great weekend to everyone and thanks for the support

[Joe90]

Has anyone who included an overdrafted checking account bankruptcy ever had any issues of payments being rejected by the old bank? Thats about the only worry I have. I paid 3 bills last week and 2 were debit card transactions and one was a check. All cleared as of this past Tuesday. Today is the 1st day I stopped direct deposit at my old bank. I am sure within a week I will hear from them via mail and then phone- but by then the payments will all be 2 weeks old so I feel that they won't be able to cancel them since they were paid or be able to chargeback the payments?

[SMinGA]

An overdraft account should be discharged like most other unsecured debts, as long as you were not using it for luxuries. (Vacations, jewelry, etc.)

Once you've opened another checking account, you probably won't have an issue even if your first account goes bad. Just don't apply for credit with them - no overdraft credit cards. After filing, perhaps make it a goal to set aside a little $ here and there to put in a savings account with your bank and have that as an OD protection.

[SMinGA]

I had a situation where I had a checking account @ USAA, and they closed my checking acct/removed my online access due to defaulted credit cards. I had a couple of autobills set up, and one I was not able to cancel because they locked me out. A $55 payment was made by USAA's bill pay to an HSBC credit card account. Even though the USAA credit card was closed! USAA could not reverse it, and so sent me bills for it.

Based on that, I'm certain that your bill pay transactions that already went thru will be fine.

Has anyone who included an overdrafted checking account bankruptcy ever had any issues of payments being rejected by the old bank? Thats about the only worry I have. I paid 3 bills last week and 2 were debit card transactions and one was a check. All cleared as of this past Tuesday. Today is the 1st day I stopped direct deposit at my old bank. I am sure within a week I will hear from them via mail and then phone- but by then the payments will all be 2 weeks old so I feel that they won't be able to cancel them since they were paid or be able to chargeback the payments?

[Joe90]

Thanks SMInGA- I'm sure all of you know how this can cause some pretty heavy stress. Not sleeping well, or eating well. Just feeling pretty blue and stressed. I feel better after hearing your reply. I am going to start putting a few dollars into a Savings account at my new bank next week. That way I will be able to save a few dollars. Thanks so much

[Blueboy]

Hi Joe, as already stated you should not have any issues with your overdraft.

Now more importantly, take a deep breath and let it out slowly, repeat a few more times and relax. Don't let this worry you to death. Oh yeah welcome to the forum!

[Joe90]

Thanks Blueboy- I hear ya loud and clear- the hard part it doing it!

[Blueboy]

Just understand that most of us here know where you are at, and things DO GET BETTER.