Chase

[SadDebtor2]

Chase is my preferred bank. I have a checking account with them as well as 4 credit cards. If I stop paying those credit cards and keep my checking account open, can they freeze my checking account?

Should I open a checking account with another institution?

Thank you!

[spidge]

I would open a new account where I have no accounts involved in the BK. Less to worry about.

[JSFleischman]

Yes, the bank can freeze your checking account.

In order to cover a loan in default, a bank has a legal right to seize funds of a guarantor or the debtor. This is known as setoff. California Financial Code Section 864 governs a Bank's right to setoff from deposit accounts, and the limitations of that right of setoff.

[SadDebtor2]

Thank you!

[SadDebtor2]

I just found this information online:

"Financial institutions cannot take money out of your account to cover missed consumer credit card payments, unless you previously authorized the bank to pay your credit card bill by automatic withdrawals from your account. (15 U.S.C. § 1666h; Regulation Z of the Truth in Lending Act, 12 C.F.R. § 226.12(d).)"

[Ridbidge]

I just found this information online:

"Financial institutions cannot take money out of your account to cover missed consumer credit card payments, unless you previously authorized the bank to pay your credit card bill by automatic withdrawals from your account. (15 U.S.C. § 1666h; Regulation Z of the Truth in Lending Act, 12 C.F.R. § 226.12(d).)"

That is, unless there is language in a contract somewhere that permits this. Check your deposit agreement. However, it is easiest to open an account at another institution that is not included in your bankruptcy.

[JSFleischman]

Every major creditor buries the permission in their agreement.

I agree - open an account at an institution at which you have no current relationship. Better safe than sorry.

[keepmine]

Be sure you don't open an account with Wells Fargo.
Even if you don't owe them any money, once they see your bk filing they'll freeze your account with the excuse they're preserving the bk estate. It'll be a few weeks of hassles between your lawyer and trustee to get the freeze removed.

[switch625]

I opened a separate checking account with a major bank (not Wells Fargo) after I filed with no problems.

[SadDebtor2]

Thank you, everyone! I will open a new account and transfer my money.