Freezing Bank Accounts?

[mrskal]

Can someone please explain, in what situation and when a bank can freeze your accounts? After reading the recent post about someone getting their CU account froze, I am curious now.

[tobee43]

it's cross collateral......

many people have loans where they bank... here's an example of why it happens:

when preparing or filing a bk...one usually stops paying their loans i.e. car loan...or the issuing bank also gave you a credit card, they freeze the checking account. awful...of course usually your checking account has your bill and food money is in there.... most times the Cu or banks freeze the account, not legally, but it's a hassle as you have now seen.

there is a moral to this story that i repeat over and over.......NEVER EVER eat where you poo......end of story.

your going to file bk.....then open an account with a small local bank...one that knows you when you come in and needs your business.

i'm certain more people have much to say on this topic and will share their reasoning as well.

[ccsjoe]

tobee is correct, but there is one exception. Some banks, specifically Wells Fargo, and some CU's will freeze accounts just because the holder filed BK, even if the holder has no credit relationship with the institution. They claim to do this to protect the interests of the bankruptcy estate and demand to receive a release from the trustee or the judge in order to release the account.

As far as opening with a small bank, sure. Not necessarily a must, but it works. I chose to open with a large national bank and have not had a glitch. And I keep the convenience of widely available ATMs

[tobee43]

tobee is correct, but there is one exception. Some banks, specifically Wells Fargo, and some CU's will freeze accounts just because the holder filed BK, even if the holder has no credit relationship with the institution. They claim to do this to protect the interests of the bankruptcy estate and demand to receive a release from the trustee or the judge in order to release the account.

As far as opening with a small bank, sure. Not necessarily a must, but it works. I chose to open with a large national bank and have not had a glitch. And I keep the convenience of widely available ATMs

yeah...they are a nasty bunch!

[Panacea]

So, I have....
Amex CC
AT&T Universal CC
Chase CC
Wells Fargo mortgage
PNC heloc

But I had Chevy Chase for my banking, which is now Capital One.

I'm safe?!?!?!?!

[ccsjoe]

Depends. Who is ATT Universal through?

Do you have any LOC with Chevy Chase?

Stupid question....are they related to Chase? or Chevy Chase (had to get that in, sorry)

There is always an element of unknown when you file, and it is impossible to guarantee 100% anything on BK. You should be fine if you have no credit, direct or indirect, with them.

[tobee43]

So, I have....
Amex CC
AT&T Universal CC
Chase CC
Wells Fargo mortgage
PNC heloc

But I had Chevy Chase for my banking, which is now Capital One.

I'm safe?!?!?!?!

safe??? depends on the empire?

[Panacea]

hmmmm....I'm googling At&t Universal and it looks like Citibank?

I have nothing but a checking account with Chevy Chase...which is now Capital One. Are Capital One and Chase in cohoots????

[rjmwx81]

I'm a little confused. How would the CU or bank know about your bankruptcy if they're not listed on your matrix? Obviously, if you have a loan with them they're going to find out, but if you have just a checking account?

[researchnerd]

I'm a little confused. How would the CU or bank know about your bankruptcy if they're not listed on your matrix? Obviously, if you have a loan with them they're going to find out, but if you have just a checking account?

Bankruptcy filings are public information. The bank isn't necessarily notified, but if they go looking for the information they will find it. Wells Fargo, for example, has a computer program that runs every night. It compares their list of account holders to the list of bankruptcies filed that day. If it finds a match, even if there are no credit accounts listed for that person, the bank can freeze all of their accounts immediately. Nice, eh? They have had their wrist slapped for doing this, but so far nobody has made them stop.

[backtoschool]

So, I have....
Amex CC
AT&T Universal CC
Chase CC
Wells Fargo mortgage
PNC heloc

But I had Chevy Chase for my banking, which is now Capital One.

I'm safe?!?!?!?!

Wells Fargo is notorious for freezing accounts.

[backtoschool]

I'm a little confused. How would the CU or bank know about your bankruptcy if they're not listed on your matrix? Obviously, if you have a loan with them they're going to find out, but if you have just a checking account?

Most banks and CU's subscribe to services by the credit reporting agencies that alert them to changes in credit status of their customers, such as bankruptcy filings, law suits, new tradelines, etc.

[backtoschool]

Bankruptcy filings are public information. The bank isn't necessarily notified, but if they go looking for the information they will find it. Wells Fargo, for example, has a computer program that runs every night. It compares their list of account holders to the list of bankruptcies filed that day. If it finds a match, even if there are no credit accounts listed for that person, the bank can freeze all of their accounts immediately. Nice, eh? They have had their wrist slapped for doing this, but so far nobody has made them stop.

Researchnerd is correct. Banks will can have an in-house program to check for bankruptcies. Many banks don't bother with their own program and simply subscribe to services offered by the credit reporting agencies that will alert them to changes in account status for their customers.

[tcreegan]

Hi all,

From posts I have seen:

Amex CC mixed; some closed then reopened ok, some shut immediately
AT&T Universal CC no basis, never heard of it
Chase CC not Cap 1 from bad to worse here, Cap 1 runs like a rash across the forum
Wells Fargo mortgage some really good reports on the mortgage part, (bank part mostly bad reviews)
PNC heloc no basis, never heard of it

Turns out there are companies that scan BK postings and sell the info to financial creditors, usually large ones. This probably works better than getting a BK notice in the mail. Big financials have dozens of mailing addresses, and the odds that the notice gets loaded onto the computer properly are not good given the quality of help they use on the front lines.

These BK searches are also probably the reason cc's with zero balances and not listed still get cut off in a BK.

btw, these BK scanning companies undoubtably also sell the info to outfits who target the newly bankrupt; all those "No Credit, No Problem" "We Want to Help You Rebuild Your Credit" etc

As for having an acct. at a bank who is going to eat your loan in the BK....tobee has the best advice seen so far "don't eat where you poo"

We switched to a small, local bank.....we walk in and get greeted by name. There is a short discussion of the weather and how our granddaughter is doing. And the effect of not having atms all over the place? We have to plan when and where we are going to spend money and get it out of the bank before Friday at 5pm Inconvienent? You bet. Saves lots of money? You bet.

Wisdom of the forum is, don't count on cc's surviving the forum, they might but odds are they won't.

...just some rambling, take it for what its worth.....

Tom in Colo

[Panacea]

Ok....Wells Fargo (my mortgage company) can possibly freeze my checking out....who is Capital One now? (used to be Chevy Chase Bank, but Capital One took over).

I have no cc's, mortageges, or helocs with Capital One. Only checking w/Capital One (used to be Chevy Chase Bank and had no credit from Chevy Chase either.....just checking)....My Chase CC is still Chase.