Wells Fargo froze my account

[jshep]

I was fully employed for over 30 years, made great money, and had really great credit.

Then the company I worked at for 22 years closed down at the end of last year. I got a new job right away, making the same money. Then, in April the new company started having trouble for the same reasons the old one did, and I was laid off and drew unemployment from April until October.

To make matters worse, I had company credit cards at the old company, and they went after me personally. Even with being laid off that long, I probably could have worked it out and continued to pay my own bills, but I couldn't pay the bills of my former employer on top of them.

So.... on Wednesday of this week my wife and I filed Chapter 7.

Over the next couple of days things seemed like they were going fine. I went to the ATM and withdrew some money on Friday morning and the account was fine. Late Friday afternoon, my wife called me from the market, and said that the Wells Fargo Debit card had been declined.

I went online and looked at the account, and it showed me with a zero balance. I should have had most of my first paycheck back from unemployment in it... but the money was "gone".

I called Wells Fargo and they referred me to a phone number to get more information about my "situation". I called the number, but of course, they were closed for the weekend.

I called the customer service line back and the Rep said that it was related to my recent filing for Bankruptcy.

I have two credit accounts with Wells Fargo, one is a Visa card and I owed no money at all on that for the last several months. The other was my home equity line, which I had kept paying through being unemployed, and have never been late on.

I did some reading up on the situation, which brought me to this website. I found another article written by a BK attorney saying that both Wells Fargo and Union Bank were the only banks he knew of that will automatically freeze a checking account when they learn that a customer has filed bankruptcy.

My own lawyer said something to me earlier in the process about getting out money out of the Wells Fargo account, but the way I understood her was that I should do that if I was behind in any payments with them.. .and I wasn't.

The money they froze was the only money we had left, and I had it there to do things like pay the house payment (inlcuding the home equity line with them), buy groceries, pay the car payment (with someone else, but also not late)... etc. Now I can't do any of that.

I was able to contact our attorney on Friday night via email, and she wrote back that she would "try and get the money released on Monday". But, we have had to go through the weekend with no money.

Of course, if I had understood that this might happened, I would have done things differently... but, this has really put us in a bind. The Attorney that wrote the article says that he recommends that his clients keep their money in a bank other than Wells Fargo or Union Bank, since he does not know of any other banks that do this.

I have engaged in an email thread with Wells customer service reps over the weekend telling them that they were putting me and my family in an emergency situation. The best they can tell me is to call on Monday. I asked if there was a place on their website that I could read up on the policy and how it works, and they said there was not, I just have to wait out the weekend.

I don't know how what they are doing could be legal. The Trustee didn't order the acount frozen, and I'm not late on any payments to Wells Fargo. What it does do is guarantee that I'll be late on any bills I get between now and when they let my money go, and nobody can tell me how long that might end up being.

What a mess.

[DeadManCrawling]

WF is notorious on this board for this type of thing.

You may actually have other accounts with them, and not even know it. For instance, you may have a card that is backed by WF but has another store name one it. Home Depot, or Kmart or Rooms To Go, or whatever.

Your agreement, if that is the case, allows cross-collateralization. This means that they can take money from ANY account you have to pay past due balances on OTHER accounts.

Of course, I do not know your exact situation, nor do I know which companies WF might work with in this fashion.

The automatic sstay should have prevented this, but, again, WF is notorious for this sort of thing.

I recall some other posters here who stated that WF froze their accounts on filing if the account had money exceeding a certain limit.

In any case, call your attorney, and do please share what you learn. I am sorry I could not offer more information on this.

[albacore44]

sorry to hear this, i empathize with your situation. i must say this is exactly why that earlier this year when i decided i would need to file, i opened up a checking account with a credit union, changed my direct deposit, and let the WF checking account dwindle down to a couple of bucks. after a couple of months they closed it. i still have not filed but i get 6 or so calls a day from WF about their CC I stopped paying.

[sufferingAZ]

What of Bank of America? Will they do the samething???? I dont remember if I signed or read anything that said "cross-collateralization" on it. They hold my 2nd and 2 cc I can no longer pay.

[junker]

absolutely,,,get your money out of b of a if you have cc,s with them and are not paying them,,,, there are many posts here that will tell you the same thing....NEVER put your money in a bank that you have other accts with..and are not going to pay them...they WILL take it...just like the op here....

[dealingsdone]

Interesting thread, I'm a little concerned now.

I have a wells fargo account that i use to pay the majority of my bills. I'm going to my 341 next week chapter 7 bk, so I have been in the system for a month or so, and to this point wells fargo has not closed my account. If they do close my account it will create trouble for me. Generally I keep under 1000 dollars in the account. Should I be doing something now or has the time they would have done something already come and gone?

Thanks,

[jshep]

sorry to hear this, i empathize with your situation. i must say this is exactly why that earlier this year when i decided i would need to file, i opened up a checking account with a credit union, changed my direct deposit, and let the WF checking account dwindle down to a couple of bucks. after a couple of months they closed it. i still have not filed but i get 6 or so calls a day from WF about their CC I stopped paying.

I have checking and savings accounts at two other banks, so I could have moved the money over. I just had no idea about the policy of Wells Fargo on this. It seemed like I did so much research before taking the plunge, but this was a major blunder on my part to not know the bank I was leaving the last of our money in is well known for doing this kind of thing.

It's a whole new world for us, and we had to learn a lot quickly to figure out what we should do. A year ago I had the kind of credit that allowed me to buy a brand new Suburban for $60,000 and drive it right off the lot the same day. Of course, I thought the old company would make the payments like they had on all of my cars for 22 years. We just went from doing really well for a really long time to having everything change. The old company provided services to other businesses, and when the economy went bad, about half of our clients went out of business. Some of these clients had been going for 40 years and more... then, poof. Just gone along with my job and income.

I really wish I had found this forum about six months ago. I doubt I would have made that mistake if I had read the messages here first. It's just hard finding things on the web. Any time you type anything into Google about bankruptcy you just get thousands of lawyers and credit schemes. I got here today by searching for "wells fargo bankruptcy freeze". I'm really happy to have found this resource, even this late in the process.

[eddiep]

There was another member here "planatery" I believe. He went through the same thing with WF. It did not have anything to do with cross colateralization issues, rather WF took it upon themselves to freeze the account on behalf of the trustee, without the trustee requesting this action. Planatary got his money back eventually but he had to contact the trustee and have him authorize the release of the money. Did you use your exemptions to protect this money? Do a search there was an entire thread start to finish.

[Lajazz947]

What of Bank of America? Will they do the samething???? I dont remember if I signed or read anything that said "cross-collateralization" on it. They hold my 2nd and 2 cc I can no longer pay.

Get your money out ASAP.

WF did the same thing to me before I filed and they did indeed have a cross collateralization agreement in the fine print.

[jshep]

There was another member here "planatery" I believe. He went through the same thing with WF. It did not have anything to do with cross colateralization issues, rather WF took it upon themselves to freeze the account on behalf of the trustee, without the trustee requesting this action. .

I will see if I can find that thread, it sounds like it would be very helpful in my situation.

My understanding right now, which is very limited due to the fact that this only happened Friday night, is that what you describe is exactly what is happening to me.

The case only got filed Wednesday afternoon. I hadn't even received it myself in the mail yet (I got it on Saturday). The trustee had just been assigned, probably on Thursday. My meeting of creditors isn't until December 10th. Then all of a sudden the account got shut down with no warning or explanation 48 hours after the case is filed. I should also mention that I live 30 miles from Los Angeles... so, it's not like I'm in a small town where five people file a year.

I'll know a lot more tomorrow and will post what I find out. It will be interesting to see how long it takes to get access to the money. This is just money left over from the first monthly paycheck I got coming off unemployment. It was just there to take care of our general living expenses... which now I don't have, so I can't do things like buy food until I get another paycheck in December.

I have found and looked over the thread now. It sounds like the same exact situation, even down to the fact that I have a child in the home that is ill. One thing I saw in the thread is that Wells Fargo only does this on accounts with more than $5K... my account had approximately $3,500 at the time of the freeze.

[jribe]

i have accounts at wells fargo as well and mine were not frozen. I didn't have any debt wtith them besides student loans (staffords) which is probably why nothing was frozen. My DD goes in there too-so i was intitially worried reading on this board that people said there accounts were frozen. So it's not across the board that wells fargo will freeze accounts; just sounds like if you have credit with them..

[jshep]

I don't have any debt with them except a home equity line of credit, which has been paid to terms, and is secured by my home (not my deposits). I still have no idea what their justification is for this. I'm still waiting for the office to open in about 20 minutes.

[BKorbust]

I had a 25K cc with BOA that I defaulted on and was charged off. I still have 2 checking and 1 savings acccount with them that they never touched. When I file I will make sure their is no money in any of those accounts though just in case.

[jshep]

Spoke with the BK Dept of Wells Fargo

I was finally able to talk to someone in the "Deposit Bankruptcy Department" at Wells Fargo.

As I had assumed, their hold on the account has nothing to do with debt to them. They said that my money was pledged to the bankrupt estate, and that on Friday they notified my Attorney and the Trustee that they had frozen the accounts pending further instructions by the Trustee.

I thought it was lovely that they took time to notify two other parties, but we were not notified which resulted in my wife being in line at the market with a basket full of food on Friday evening and no way to pay for it.

I asked them under what authority they were doing this. They said that in the ost recent account agreement on page 13 under "Adverse Claims and Legal Practices" they spell out the policy. They also said they were acting under sections 541 and 542 of the Bankruptcy code. I have not yet looked these up, but I will.

I explained that they had placed me and my family in an emergency situation, and that we have a sick minor child at home who requires medication that we are unable to pay for.

The person seemed unphased by it and kept telling me that I needed to call my Attorney and have them contact the Trustee, who would authorize them to release the funds.

I told her that I was aware of people who had waited weeks for a release, and she assured me that it is unusual for that to happen. I asked if if there was any recourse for me if that did happen, and she said she didn't know of any.

She also told me that any other money I put in the account would be left alone. They were only allowed to take what was in the account the day they were made aware of the Bankruptcy. So, I could put more money in and use that to operate. I explained that I have been unemployed for six months and what was in the account was my first paycheck after going back to work. Of course, they hear this stuff every day an could care less.

I explained how this is a very dangerous thing to do to families, especially when they are struggling financially. That due to my daughters condition we have professionals who are treating her, and if they were to realize that we were in a position where we could not buy her medicine, they might take her into foster care, and then we would have to fight to get her back.

You guessed it... they still could care less.

I called my Attorney and she said she was waiting for her assistant to come in and she would get the assistant to call the Trustee and get a letter faxed over today to get the funds released. She too acted like it was all no big deal and I shouldn't let myself get so upset over it.

I hope they are all right. So far, nobody is doing anything about it but me.

According to what I was told by the person at Wells Fargo, it sounds as if I could have walked into the bank on Thursday, taken most of the cash (leaving enough for the account to stay open), took it home, put it in a sock.... then, this morning walk back in and redeposit the money an none of this would have happened. If I had read this forum last week, I would probably would have known that.

Thank you to everyone here from the bottom of my heart, for helping me understand what was happening. It was a very lonely weekend, and finding this forum really helped.

I will continue to update this thread as things develop. Hopefully, it willl help someone in the future not make the same mistake I did by leaving all the money I had left in the world in a Wells Fargo Bank account on the day my bankruptcy was filed.

-Joe

[Mi Bankruptcy]

Wow.. great of you to update Joe. I had 3 accounts with Wellsfargo when I filed. A mortgage, student loan & Auto Loan. I reaffirmed all of them after I filed Chapter 7. To be clear and for the benefit of other readers is the bank account that was frozen a Wells Fargo checking or savings account; meaning Wells didn't freeze your account at another bank?

Wells Fargo never touched my bank. I don't bank with them and I have my house payment automatically deducted from them from my bank account. I was also current on everything with Wells. I filed Nov 08 and discharged May 09.